A key component of Personal Finance is personal loans but what are they and why are they called so?

Definition of personal loans

This is a contract whereby a financial institution (bank or cash), called the lender, customer delivery, which is considered as a borrower, a certain amount of money, called capital or amount of loan established in the contract the manner in which the customer must refund the loan and remunerative pay interest, usually in installments.

Why they are called personal loans?

They are called personal because banks do not ask Additional guarantees. The client just responds with their present or future, i.e. personal guarantees. Precisely for this reason, the bank or fund to which we ask the loan analysis of our solvency, request nominations, the statement of income, Property Tax or house deed, etc.. By not having to provide any additional security (e.g. a house, as in the mortgage loans), the processing of personal loans is much faster. In return, the interest rate is usually higher.

The personal loans often used, usually the purchase of consumer goods and services, such as a car, computer, home furnishings, vacation, etc.

There are usually of high value. Usually we can not request a personal loan more than 30,000 euros. The maximum period for which are often ordered is 8 years in monthly, quarterly or six, and are available from fixed rate or variable.

As for the fees and expenses associated with a personal loan we have the fee, the committee and the partial or total cancellation. We also have to pay the expenses of Ontario, and the commission for the unpaid claim.

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