What Is a Personal Loan – Pros & Cons of Getting One

Posted by : Felix Polding | On : March 11, 2020

All of us want to have our own car and home and to have a holiday of your favourite destination. However, most people’s problem is not having enough money to bring these things into reality. Luckily, there are some individuals and financial institutions offering personal loans to those in need.

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Personal loans

Years back, buying a new car, your house and lot and taking your family to your dream destination was not easy to plan all that especially if you didn’t have the necessary funds. Thanks to personal loans, it is possible for everyone to borrow money for any kind of requirement.

Aside from cars, house and dream vacation, personal loans can also be helpful every now and then during emergencies. Running out of cash can happen at any time and that is when a personal advance can come in handy.

Personal loans literally mould themselves to reconcile with the financial needs of any borrower. Generally, “personal loans” is a term used for general-purpose loans. Some people also describe it as a signature or unsecured advances. Personal loans are in fact a lump sum which is borrowed from a bank or building society or any other lender. Good personal loans are a rare breed.

Well, you might think that person is easy to get but only for those who have a good credit score. The truth is, personal loans are also available for people who lost their job, who failed in business or have experienced bankruptcy in any kind.

However, personal loans for people with bad debt have consequences. Normally, loans for individuals and companies with bad debts come along with a high annual percentage rate or APR. If you pay off your loan early so they can make up for the interest they’re missing out on, most banks will charge you a prepayment penalty.

For more on the pros and cons of personal loans, read this: