What are Personal Loans?
A personal loan is often referred to as an 'unsecured loan' as it doesn’t have any collateral pitted against it as security. For this reason, the interest rates on personal loans are more often than not at a higher rate than a secured loan (for example, a home loan). The amount that you will be able to receive and the rate at which you will be charged will depend on the amount that you earn, how long you have been employed as well as your credit history. It is always mindful to have a structured plan in place with personal loans as they are often met with defaults.
Why have a Personal Loan?
Personal loans are one way of acquiring assets such as a car, holiday or boat without having the total amount of cash up front. Personal loans are still popular as they often provide you with a cheaper interest rate that other methods do such as a credit card.