No matter how meticulous you are about your finances, things will not always go the way you planned.
Inevitably, there will be times when you may find yourself strapped for cash. No matter how well you budget, there will be expenses that will come up that you did not foresee and hence did not budget for.
At times like these, a personal loan may be just the best solution for you.
Like the name suggests, a personal loan is a type of loan that is used for personal purposes rather than for business purposes. Although personal loans may be either secured or unsecured, the vast majority of personal loans are unsecured. This means that no collateral needs to be pledged in order to receive these loans.
If you need cash, a personal loan can help you to fill any financial gaps that you may have.
Bear in mind however, that the interest rates on personal loans may be higher than the interest rates charged on secured loan.
This is because the legal moneylender is taking a greater risk when they lend you money without having any collateral to fall back on if you fail to repay as agreed.
To obtain a personal loan, you would need to fill out an application form and the bank or any licensed moneylender will make checks into your credit history in order to determine what interest rate to charge you. If your application is approved, you will get a short term loan that needs to be repaid over the term that is agreed. The normal term for a personal loan ranges from 12 months to 60 months and the interest rate is usually fixed over the loan term. As long as you make your payments on time and in full, you will not incur any late fees.