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Personal Loans

A personal loan is a loan provided by a financial institution for the purchase of goods (works, services) for personal, household and other non-production needs. It is the most popular banking service today. Banks offer personal loans for a variety of purposes: the purchase of furniture, household appliances, the purchase of housing, cars, travel vouchers, payment for education, treatment.

Obtaining a loan implies the obligation of the borrower to repay the principal amount of the debt within the terms established by the loan agreement, as well as to pay interest for using the loan.

What are personal loans?

There are two main types of personal loans. These are purpose and non-purpose loans. Purpose loans imply the use of credit funds for strictly defined purposes and spending on them is carefully controlled by the lender, but the money you received on the terms of non-purpose lending is at your complete disposal and does not require reporting to the lender. However, the disadvantage of on-purpose personal loans is a higher interest rate.

There are many other criteria by which personal loans are classified. So, they can be divided into long-, medium- and short-term, depending on the term of the loan; on the presence or absence of collateral or surety, etc.

Also, one of the forms of personal lending is an installment plan.

Pros of a personal loan

Cons of a personal loan

How to choose the best personal loan?

So, you “soberly” assessed your financial condition and decided to take a personal loan. What should you pay attention to?

What else in the loan agreement should alert you:

Don’t rush to sign the contract! Read all paragraphs, even in the smallest print. Do not hesitate to clarify, ask questions, request the relevant company documents. If there is such an opportunity, do not sign the loan agreement immediately after reading it, take it home, read it carefully again, consult a competent financier or lawyer.

If you have already decided to take a personal loan, it is your direct responsibility to repay it on time and in full in accordance with the loan agreement and the payment schedule.