Why should I take a personal loan?

Personal Loan also referred as consumer loan, is loan money granted to a person for any personal, household, business or commercial purpose. This kind of loan can be taken for any random reason varying from vacation to marriage and from fixing a refrigerator to pay somebody’s debt.

The most important feature of a personal loan is that it is not secured by collateral, which means to render something of value, such as a home or car etc.This is offered so that the lender can repossess in case of the account as agreed is not repaid. Personal loans are guaranteed only by the promise to repay, and thus they are also known as "signature loans" or "unsecured loans."
How to qualify for a personal loan
As stated earlier, since the lender is forced to depend solely on the borrower's desire to repay the loan as agreed, getting the credit is highly important.
The lender takes your application and considers your debt and income. Your income and debt picture affect the amount the lender is willing to lend you and how long it is willing to lend the money. The lender also gathers a credit report, studies your scores and offers you a credit grade.
Depending on your credit grade, loan amount and the length of time you wish to borrow, your personal loan rate will likely fall between six and 36 percent. Rates and terms vary a lot, so it's advised to shop a bit and get quotes from several competing lenders also.
Advantages of taking a personal loan
a) Complete flexibility of end-use: A personal loan has no restrictions on how you should spend the loan amount. As compared to a home loan or car loan, where the loan amount can only be used to buy a property or vehicle, personal loan allows you the freedom to use the money in any way you want.
b) 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.