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Facts about Personal Loans

Sprint loans
Aug 12, 2017
Personal loans are basic types of loans that a individual borrow from banks or any other financial institutions. These types of loans design meets the need of a borrower personal needs like unexpected expenditure, home improvement or repair, consolidating debt and medical expenses. People also plan to take personal loans for expenses like education expenses, purchase vehicle and expense of a holiday tour.  In order to fulfill the different needs of different borrowers, bank and many other financial institution offer diversified personal loans like Secured loan, unsecured loans, variable rate loans, fix rate loan, line of credit, installment loan etc. These types of loans are very hard to get without fulfilling the requirements. They are some important factors which important to know before going for a personal loan.

They are unsecured

These loans are unsecured means borrower doesn’t need to upfront any asset as guaranty. This is the reason why these types of loans are very hard to get. Though lender can’t claim any property or any other asset if borrower fail to repay the loan on time, lender can’t take other steps like filing lawsuit, constant harassment though it is illegal, hiring a agency to collect money etc.

Loan amount are fixed

Banks calculate the amount of personal by taking some important variable into account like credit history, credit score, borrower income and nature of job. There are many other banks who offer per-fixed personal loans.

Fixed Interest rate

Usually interest rate of this type of loan is fixed. Borrower has to pay same rate of interest rate during the lifespan of loan. Credit rate play a vital role to determine the interest rate. Good credit rate can give you lower interest rate and bad credit rate give you opposite. Some financial institutions offer personal loans with variable interest rate which is a drawback. Fluctuation in interest rate can make it difficult to payout the loan.

Repayment period is fixed

Repayment period of personal loan is fixed. Personal loans refunds are schedule over minimum of 6 to 12 month and maximum of 5 to 10 years for huge amount.  When you are refunding your loan within an shorter repayment schedule you have to pay lower then a longer repayment schedule. While you are paying within a longer repayment schedule automatically you have to pay more amount of money as interest. Sometime it is also the reason to increase interest rate.

Affect credit score

As per your Bank’s of lender’s reports about your loan account details to monitoring bureaus liable to set your credit ratings. In the case of delay in repayment can affect your credit rating badly and bad credit rating becomes a obstacle to get loans or credit card in future

Beware of Lender

beware of lender who providing you loan even if you have a bad credit rate. There are many cases where borrower ask to deposit money as security and after that he get nothing in return.
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