Often people are faced with emergency or other situations wherein they require larger sums of money. These situations might be related to health issues, accidental damage correction, expenses related to marriage, purchasing of house, household appliances purchase or replacement. There might be other expenses where one would require taking a loan from the banks for meeting varied needs. In such a situation one is left with no choice but to apply for a personal loan.
Personal loans are offered by banks and the lending institutions. These are designed to offer money to the individuals with no restriction on the spending specifications of the same. One can spend the loan amount for virtually any purpose.
Unsecured personal loans: These are the most popular category of personal loans. These loans are often given in small amounts, require little documentation and are offered for a smaller duration generally ranging between 6 months to one year. As these loans are unsecured the risk to the lender is high and hence the interest rate offered on these loans is generally pretty high.
Secured personal loans: If the loan amount required is high, lenders ask for co-signers or collateral from the borrowers. This is to secure their lending amount lest the borrower fails to make the repayment.
Whether you apply for any kind of unsecured loans certain basic criteria should be met by the borrower. Licensed money lender will approve the loan on the basis of the repaying capacity of the borrowers.
It is therefore advised that the borrowers must work out their eligibility before applying for any kind of personal loans in order to get confirmed approvals.