The word "Personal Loan" reflects its own definition. This is the loan that helps an individual to fulfil his/her personal needs. It is may be for renovating homes, covering current medical expenses, car etc. It is a sort of debt which is neither a business loan nor a long-term home loan.
Personal loan is that kind of loan which provides financial relief in the form of cash advancement... it is free of hassle and does not need to follow complicated process, has minimum requirement to be fulfilled. And the approval is gained faster.
Now let's think about what makes it different from other loans. Well, personal loan is a short-term loan and its period of repayment ranges from one year to five years. In comparison to mortgage, it is shorter. As mortgage needs at least a time span of ten to thirty years for repayment.
Unlike other loans, personal loan is not tied to an asset.
Personal loan helps in making debt consolidation. That is, the combining of several unsecured debts into a single, new loan that is more favorable. It allows an individual to cover current debts. Individuals taking out a debt consolidation loan basically combine all their high-interest rate debts into a single, lower interest rate loan.
Therefore, personal loan is that kind of loan which provides financial relief in the form of cash advancement.
The alluring thing about this loan is that, it is free of hassle and does not need to follow complicated process, has minimum requirement to be fulfilled. And the approval is gained faster.
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