Financial Emergency

What Are the Various Categories of Personal Loans and Their Usages?

  •   Personal Loans

    and

    Their Usages

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Demonstrates the Advancement

The advent of the signature loan clearly demonstrates the advancement in loan processing. As the name signifies, the signature loan is the one where the person applies for the loan and just signs a promissory note to pay back the loan within the stipulated time period. The time which is specified is called the loan term. This may be 6 months or even 5-7 years, depending on the parties involved. Anyone willing to take signature loan will need to have a great credit history. The borrower’s assets are not considered to that extent. The rules and regulations vary. Certain loans need the borrower to have a good credit history while others need both sound credit score and accounting for asset. Documentation is required to show the number of assets held by the borrower.

Documents

Payday loans have become most popular in today’s time. The market of cash advance loan or payday loan is getting popular since the borrower gets quick access to cash amount. Apart from this, the borrowers need not have a sound credit score. Least bit of credit criteria is needed for the approval process of the loan. Just by submitting identity proof, proof of income, residential proof and other documents, the approval will be attained. Most of the companies offer this kind of loan without any documents and proofs.

Credit card loan is the popular form of personal loan which is also known as cash advance credit card loan.

The loan process is again very quick and the general public can meet the emergency needs instantly.

It has the major drawback that the interest rate is higher here when compared to other kinds of personal loans.

You can enjoy cash advances from check cashing facility, ATM machines, etc.

Wedding loan is the latest kind of personal loan which helps one meet wedding expenses.

It has carved out its niche in the loan industry as it meets the wedding expenses on your behalf.

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Wedding expenses may even move up to 6 figures but since it is the most important event in the entire life one cannot make compromises. This kind of loan may be both secured and unsecured. A lot is dependent on the amount of loan and the term period.

Recreational, automotive or vehicle loan is another kind of personal loan. This is the non-signature loan where financial lien is laid against an asset to acquire the loan. Since the loan is offered by the automobile manufacturers most of the times, the interest rate is very low.