Personal Loans

A personal loan (also known as a consumer loan) describes any situation in which an individual borrows money for personal need, including making investments in a company. Personal loans are available from banks and other lenders, and aren’t secured against any asset such as your home. They’re also known as unsecured loans.

All personal loans have three common elements:

Evidence of the debt (promissory note)
An amount borrowed (principal)
The cost of borrowing (interest rate)

When the repayment terms of a loan are met, the promissory note is retired. If loan payments are not made as agreed, the lender can use the legal system to recover its money. Mortgages for homes or cottages fall into the category of consumer loans, but they are not typically referred to as personal loans.

How to pick the best personal loan :

Do I meet the requirements to qualify for a personal loan?
What is the personal loan for?
What are the interest rates?
What are the fees associated with a personal loan?
What is the term of the loan?
How do you plan to pay it off?

It is important to manage any type of credit you use wisely, including a personal loan. Personal loans can be helpful when managed well, but taking on debt should never be something you do lightly – or without looking carefully at your overall financial picture before you pull the trigger.