Facts to Know before Applying for Personal Loans

Any financial menace is not so big, if you have a good credit score in support of your statement. Any time, any day, you could reach for loans in banks or lenders to consolidate your debt or paying for an unexpected expense. But, in the presence of several types of loans, how could one manage to opt for appropriate. However, personal loans tend to adjust for any requirement you have.

These loans are general purpose and very suitable. Here, in this article we will tell about everything you should know before getting a deal seal.

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  • Personal loans are unsecured:  The most amazing part of this loan is that it is unsecured. It means it doesn’t require you to use asset or collateral. Often, secured loans need a house, car or share to be put at stake but not personal loans. This seems to be the biggest reason why it is difficult to get it. Also, any default on personal loan, doesn’t authorize lender to cease your property. Lenders are at higher risk in unsecured form of loans however, to deal with situation, lenders can lawsuit you or take other actions.
  • Fixed one time loan: Mostly banks put a cap on the amount of money you could borrow in personal loans. The amount differs from lenders to lenders and strictly depended on the income, repayment capability and credit score of the borrower. Also, unlike credit cards which are also a form of unsecured loan, personal loans are a one-time loan. Under the scheme, money would be dispensed only once. To get another loan, you have to restart the process from beginning.
  • Fixed interest rate: Once you agree to pay loans on certain fixed rate, it would be locked for entire time-tenure of loan. There is no flexibility at all in interest rates, till the last penny of amount is paid back but, the charged interest rates could vary. A borrower with a good cibil score and history would get lower interest rates compared to a person with bad credit.
  • Fixed time tenure: Personal loans come up with fixed time tenure to repay it. It may be for 1, 2 or 5 years, depending upon bank. According to the total time, EMI is calculated. One important point which should be noted here that longer time period lowers your EMI but, you would end up paying more on interest rates.
  • Credit score is must: Basically, it is a two-way process between credit score and personal loans. For getting a personal loan, you must have good credit score which represents trust worthiness of borrower. On the other hand, lender report every detail of your loan to credit bureaus which means your timely repayment, amount, all would increase or decrease your score immensely.

One should be aware of the increasing scams on loans nowadays. Many individual lenders give loans on bad credit. It is better advised to avail loans from banks. ICICI bank personal loans are the perfect option that offers best deal to their customer other than government loans.