Personal loan can be taken to meet varied needs, such as purchasing a home, a car, making home improvements, consolidating debts and anything under the sun. People prefer taking a personal loan because there is no compulsion of using the loan amount for a specific purpose.

Personal loan is of two types, secured and unsecured. If you own a property and are ready to pledge it as security, then go for a secured personal loan. Here, you get the advantage of getting approval for a larger loan amount, lower interest rate and flexible terms and conditions. This lessens the burden of the debt. However, there is always the risk of losing your property in case you fail to repay the loan amount on time. If you do not own a property or do not want to risk your property, then unsecured personal loan is the ideal choice. You get the loan without pledging anything. However, you have to settle for a higher interest rate and strict terms and conditions.

Many people opt for a personal loan to consolidate their debts. It is quite cumbersome to manage multiple debts. Moreover, one tends to miss a few payments as it becomes virtually impossible to keep a track of so many debt repayments. This in turn has a negative effect on the credit rating. It becomes quite difficult for a borrower with a poor credit rating to avail a loan. So, people prefer to clear their pending debts and prefer to deal with a single loan and a single lender by using personal loan.

It is difficult, though not impossible, for people with bad credit history to get a personal loan. Such borrowers have to bear the brunt of a high interest rate and stringent repayment terms.

Overall, personal loan is a popular means available for meeting the plethora of needs and desires you have nurtured for so long.