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A Personal loan is a scheme that offers money to the people to fulfill their financial requirements. This scheme can be used for lots of purposes depending upon the requirement. It can be used to acquire funds to buy a vehicle, going for a trip with family, pay debts, finance for renovating the house, paying medical bills etc. It can be used for most of the financial emergencies that one can think of. There are volumes of banks and firms that offer unsecured debt to the people at competitive rates. These financers include the private and nationalized banks and many finance companies. All these lenders have their own terms and conditions. An example of a scheme is Citibank Personal Loan which is offered by Citibank Bank. There are many other financers in the market and one should consult as many lending institutions as possible to get the best personal loan. The lender provides the amount after completing all the formalities to get the loan. The person can use this scheme to fund any requirement of life. The applicant has to return this money to the lender coupled with interest rates in the repayment period. The longer the tenure the less will be the interest rates charged by the lender. One is free to select the tenure according to the capability to repay the loan. Personal loan comes in two categories: secured and unsecured. Usually the lenders offer this scheme in unsecured form i.e. without asking for collateral. Secured loan as the name signifies is a scheme where the customer has to put a property to the lender. It can be a vehicle or home, and this property comes under the authority of the lender in case of non-repayment of a loan. An unsecured loan is a deal where a person gets money without providing any collateral to the lender. Usually the rate of interest offered under this scheme is higher as compared to the secured loans. Before applying for a personal loan, the person should check the rate of interest charged by various lenders in the market. The interest rates decide the amount that the applicant has to pay at the end of tenure. One should also look upon the fixed and floating interest rates. The person should also check the pre and post payment penalties and other cost incurred to get the loan. The applicant should pay the loan on time without any default to avoid any legal penalties.
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