Personal loan is a loan taken by an individual to fulfill financial emergencies or any personal expense like -for wedding, medical emergencies, to renovate home or even for planning a vacation. Its provided by an entity (Bank) to another entity at an interest rate, and evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and date of repayment. Unlike many other kinds of loan, there is no restriction on how the borrowed amount is finally used – the borrower has full freedom to use the money for any purpose they want.

Features and Benefits of Personal Loans

Complete flexibility of end-use

There are no restrictions on how you should spend the loan amount.  This in contrast to a home loan or auto loan where the loan amount can only be used to buy a property or a vehicle respectively.  A personal loan allows you the freedom to use the money in any way you want.

Lack of collateral

A personal loan is an ‘unsecured loan’, meaning you are not required to provide any security to the lender in the form of cash, shares or any other assets.  This might make it more attractive to some customers who may not be able to raise the cash required as collateral.