What is a Personal Loan?
Need cashflow but you’re unwilling to mortgage your home? Then a personal loan might be your answer.
Also known as an unsecured debt, taking up a personal loan is restrictive in loan size but is readily available via banks and financial institutions. Despite the smaller amount in loan, banks tend to charge higher interest rates to compensate the scale thus reaping higher margins.
Getting a Personal Loan
Although personal loans yield higher percentages of profit for banks or financial institutions, they are placed at a high risk of bad debts especially when no collateral is used to secure the loan. Hence a brief background on finances, career situation and other relevant information will be conducted to assess the candidates’ suitability for a personal loan.
If one fails to repay the bank, it will result in a downgrade of one’s credit score, making it harder for future loan or business plans. Nonetheless, a personal loan is a great idea to liquidate personal cash flow for purchases as long as payments are made on time.