Things You Should Know About Personal Loans

What is a loan? In simple words, the loan is an amount you borrow from an individual or a bank which you intend to pay back with additional charges.
Whatever might be the reason to apply for the loan, from home renovation to buying a new car, personal loans are relatively easy when you need additional cash with comparatively less interest rate. There are a number of banks in World, who are offering personal loans to individuals in comparatively less interest rate. The banks have undoubtedly done great efforts to establish a secure position in the region and as the banking industry had to face a lot of hurdles in the start.

Legit Loans-Reasons for a personal loan

Personal loans are easier to get if they are applied for a valid reason. Some of the most common reasons for personal loans are:
  1. Home renovations
  2. Wedding ceremony
  3. Payback debt
  4. Emergency needs
  5. Starting a Business
So if you have not applied for the loan before, there is no need to worry as our quick guide is here to help you navigate the best loan.
When a person applies for a loan, the objective is somehow very clear. Whether it is the home renovation or business startup, personal loans are found everywhere.  The repayment cycle is scheduled with the bank and the timeline of repayment is also set. The interest rate is negotiated with the bank individually as it’s never fixed.
But one needs to meet certain criteria before getting the desired personal loan. The reason seems very clear from the fact that the bank has to make sure that the individual can pay back the desired loan at the respective time. Some of the things, most banks consider are:

Previous Banking History

  • The bank checks the history of the lender which includes the loans taken previously by the respective bank.
  • The bank makes sure that the loans were returned at the respective time.
  • It also verified that the person is not involved in any misconduct which goes against the rule of the bank or the country.

Bank and Income Statements


  • Obviously, your salary or income does matter. The bank checks your salary and current status of your job.
  • The amount of loan depends upon your salary and your previous record with the bank.

Credibility

Higher credibility reduces the chances of rejection for the loan. Your previous history with the bank as well as your billing record is carefully considered before finalizing the loan deal with you. The bank makes sure that you paid your previous bills on time, and if you did, chances of getting accepted are pretty high!
So what are the advantages one receives by getting a personal loan? The advantages are rare and helpful especially for those who want extra cash for events and occasions. Personal loans are way better than spending your own savings, as you can use them for future financial investments.
  • The most bank offers loan to 50,000 to 2 million that depends upon your salary, credibility and your previous record. By that amount of loan, you can cope up with any emergency expense which may occur at any time.
  • The person is not liable to pay back the loan in full as he or she can take installments. The installments help the consumer determine the budget and the amount the person has to return every month.
  • The payment amount doesn’t increase with every installment. This is one of the misconceptions about banking that prevails among people. The amount remains the same and doesn’t increase if it is paid in the given period.
  • The article doesn’t intend to promote personal loan neither it tends to convince you in any way to go for the personal loan. The article is soliciting the use of personal loan and everything related to it. It’s always wiser to look both sides of the coin.
    The negative side of the story isn’t as simple as it looks. Things are a bit complicated as one need to examine them before going for the personal loan.
    • A personal loan is relatively harder to get a bank doesn’t release loan to everyone until and unless a profound search hasn’t been done. Bank proofread all of your banking histories and analyzes your credibility before it finalizes your loan.
    • Interest rates are high but still way lesser than credit cards. Interest rate normally lies between 18%-25%
    • You are not allowed to pay a single penny more than the set installment. Even if you wish to pay back your loan earlier in fewer installments, you can’t pay extra for the respective installment.
    Credit card or personal loan? It’s the same bottle but packed with a new punch. As long as you aren’t going to study your needs, finding the best for your need is inevitable. Compare personal loans and find out if they can work for you.

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