personal loan definition

Topics: Loan, Debt, Finance Pages: 2 (558 words) Published: October 27, 2013
In life, you are always bound to come across some tough financial situations. At such incidences you always need some help. This can be the times you thinking of a new business venture or changing your living standards. You can seek some help in financial institutions or financial consultants at such situations. Such ventures force you to utilize the available personal saving to solve such situations. Loans are usually the easiest solution to such situations. They are categorized into public loans and personal loans. Persona loan is the money that an individual borrows for a certain period of time for assistance in his/her personal finances. This loan varies depending on the period borrowed, size and dimensions of the loan and also by looking at terms and conditions which apply. We usually have long-terms personal loans and short-term personal loans. The long term may involve mortgages. This long-term loans are usually associated with large amount of money. The short-term personal loan basically involves small rage of money which usually repaid within a short period of time. This applies incase of emergences which need rapid response, let’s say in case of accident of medication attention. The repayment is usually done at certain fixed interest rates depending on the period of repayment and risks involved. This further categorizes the personal loans to another security level of secured and unsecured loans. Secured loan involves signatories which can be relayed on if the repayment is defaulted. This may involve other securities such as personal property and assets. Most of these secured loans are associated with banks. Mostly the security involves cars, houses and also business premises. The security must correspond to the amount of loan borrowed. The loaned is usually bound to lose his assets and property once the repayment is default. They are mostly used for investment schemes, education or any other long term business. With the...
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