Personal Loan Guide
Personal loan is a very good option when you are in a financial fix. The loan you take from the bank has to be utilized wisely to avoid financial woes. There are many restrictions on usage of different loans offered by the banks but, unsecured personal loan is an odd man out. It sounds pretty cool to hear that you can easily fetch the loan without pledging collateral. A fast loan issued by the bank can rescue you from the financial distress immediately.There are no long and stringent processing requirements for the best personal loan, it will be approved quickly and the amount is transferred to your bank either instantly or in few days if you can qualify those strict requirements specified by the banks. Before you apply for the quick loans with the bank, understand that, interest rate on these fast loans will not be soft on your pocket. However, these loans are good option to address an unexpected expense in life.
Unsecured personal loans are sanctioned all the regional and national banks without asking any security. The lenders have no chance to take the property to pay off the debts if you default the loan so, these loans are difficult to qualify unlike other loans. This is one big reason why the personal loan interest rates are high in all the banks. However, the lender may deploy other collection options like employing collection agencies, reporting to credit card agencies (your credit score will be affected) failing a lawsuit against you.
Different banks have different set of guidelines about the amount that can be borrowed through small personal loan. Good your credit score is, higher the amount you can borrow through loan. Some banks do have cap on the maximum amount that can be issued through these loans. In most of the cases, personal loan interest rates are fixed.
The repayment period of these loans is small too. You may have to repay the loan within the period of 1 to 7 years. When you choose to go with long loan tenures, your monthly repayments remain small but, you will end up in paying more interest on completion of the tenure. It is always advisable to have shorter repayments for small loans. Moreover, having open loan for long time could affect your ability fetch credit cards.
Personal loan and credit score
All the leading banks report your loan details to credit bureaus. Remember, credit reporting agencies will have information about your current credit score, your records about timely repayment of loan. You can keep up good credit score only when you are prompt at making repayment of the loans. This credit score is very important you to stay eligible for different types of loans offered by the banks.
Where should you apply?
In order to make it easy to get the small personal loan, you should prefer to apply with the bank where you already have personal account. A wise thought here is to borrow the amount that you can afford to repay.