Personal loans are one of the most versatile types of loans since they can be used to finance almost any type of expense. Plus, since personal loans are available as either secured or unsecured loans, they are available to homeowners and non-homeowners alike. Moreover, personal loans are designed in such a wide variety that they are available to consumers from all walks of life and for all types of borrowers from bad credit borrowers to those with perfect credit.
While personal loans are typically for smaller sums of money and for shorter terms than most home loans, they are versatile enough to meet the needs of most borrowers. Personal loans have also been referred to as installment loans. An installment or personal loan is set up exactly like other loans. The borrower accesses a sum of money form a lender and repays the debt on a monthly basis by making a payment that includes a portion of the loan balance along with interest charges.
The monthly payment is determined by four basic facets of the personal loan: the sum of the borrowed debt, the interest variable (fixed vs. adjustable), the interest rate charged, and the term or number of years that the debt is being held. Each of these factors weighs in and helps to create the monthly payment.
Personal loans are available for borrowers with all kinds of credit: perfect, good, fair, and bad. The better the credit rating of the borrower is, the lower the interest rate will be for the debt. In general, shopping around for a personal loan is a wise idea since the interest rate can vary widely across lenders.
Intro: Readily accessible, personal loans can be used for almost any type of purchase or expense.