Personal loans are the debts which are taken on by any individual when there is a lack of money or at the time of some emergency. In almost the life of everyone, there are the situations which arrive when he or she is in need of extra money such as to pay the bills, to buy a home, for the tuition of children or for car repair, etc.
There are a number of banks which offer loans to the people who are in need. These loans are based upon certain terms and conditions between two parties, one who is in need of the loan and the other providing the loan. The loans rates usually differ depend upon the kind of the loan you are looking for.
Personal loans are mainly of two types, i.e., secured and unsecured. A secured personal loan is one which is advanced on the basis of some asset owned by the person asking for the loan. These loans are also called as low-risk loans, as in such kind of loans generally the interest rates are low and you can get a longer period of time for the repayment. On the other hand, an unsecured loan is that which one can get on the basis of his credit history and the ability to pay it back. These loans are also known as high-risk loans as the companies charge very high-interest rates and you need to pay them back within a short period of time, i.e., only two weeks or even less.
The banks that offer personal Loans can also be distinguished on the basis of interest rates, i.e., the fixed rate personal loans and the variable rate personal loans. The fixed rate loans are those where the interest rate remains same throughout the lifetime of the loan but in variable rate loans, the interest rate can change as per changes in the balance, credit trouble, etc.
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