A personal loan is a fixed amount of money you can borrow from a bank with a premium to pay back over a specific time. Usually, it comes up with interest.
The personal loan you borrow should be paid
- Full amount
- Interest
- Applicable fees
Payments should also be made through installments. Personal loans are typically used for specific purposes such as home renovations, furniture, and cars. All these are with
- higher interest rates
- Most personal loans range from 100 dollars to 50,000 dollars with a time period between 6 and 60 months.
Personal loans are available from traditional lenders such as :
- banks
- credit unions
- payday lenders
- Title loan companies
- Private lenders
- Pawnshops
HOW DO THEY WORK?
If you are generally taking a personal loan they will have a
- Regular income
- bank account
- permanent address
Most lenders want a credit check when you apply for a personal loan to check your credit score and they note if you have debt. Later they specify your loan options, interest rate, and the type of loan you qualify for. Credit records typically help lenders to make you sure to pay your personal loan.
Your lender usually gives you the money for the loan in one of the following ways
- In cash
- Deposit into your bank account
- e - transfer
- Direct from the lenders if you have dept
- Pre-pay card
When you are taking a personal loan, most lenders ask for your bank information so that they can take the payment directly from your account. This is called the PRE-AUTHORIZED DEBIT.
Some lenders also send information about your personal loan payment to the credit agencies. If your lender reports to the credit agency, you can improve your credit score by making your payment on time. If you make your payments on time you may have a negative impact on your credit score.
NOTE: you may allowed to make extra payments of the pay of your loan before the end of a time without any penalty. It will help you to save interest fees and pay off your loan earlier at time.
Renegotiate the terms:
You may also Renegotiate the terms of the personal loan against your lender in case your financial situation changes. Then you may pay the fee for services.
FEDERALLY REGULATED LENDERS:
Federally regulated lenders like banks have to keep you the full information when you take out a personal loan.
- Amount of the personal loan
- interest rate (fixed or variable)
- Term of loan
- Payment amount
- Fees and service charges
- Optional services
Other lenders like credit unions and alternative lenders, provincial or territorial lenders are may not required to provide this information.
Remember, before you sign a personal loan agreement make sure you understand terms and conditions Otherwise ask them about anything you don't understand.
TYPES OF PERSONAL LOANS:
There are 2 types of personal loans:
1) Secure Loans:
It uses an asset such as a car as a promise to your lender that you pay back the loan.
2) Unsecured loans:
It is a loan that doesn't require collateral payment.
THINGS TO KNOW BEFORE YOU APPLY:
- Don't take a personal loan when you don't have the authority to pay it back
- Show around when you considering the personal loan.
- calculate the total cost of the loan | Payment amount* number of payments
- Check the interest rate on the personal loan.
- Your lender may offer optional loan insurance for your personal loan. Check this insurance and make use of it during emergencies.
DISCLAIMER:
These informations are real and it does not contain any kind of fake information. These are just for the help of the people and we are not responsible for the misuse of the information. And we request to use this information as much as possible for the good purpose.
CONCLUSION:
Personal loans help us to overcome our financial needs. It will help us to fulfill our dreams. Personal loans are very useful and also it's risky if we don't pay it back on time.
Tags
personal loan