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Personal loans-Popular loans over the Internet
Research shows that more and more people are opting for personal loans over the Internet. Its growing popularity can be attributed to factors like:
  • Convenient presence of numerous lenders, which makes loans more accessible and the entire loaning process very expedient
  • Better transparency in lending rates across the country
  • Cheap loan deals as compared to conventional lending institutions, as the overheads of online lenders are comparatively less
The personal loans category is like a one-stop credit shop, as there are a variety of products to choose from – bad credit loans, business loans, car loans, career development loans, cosmetic surgery loans, debt consolidation loans, education loans, holiday loans, homeowner loans, home improvement loans and wedding loans.
Most of the above mentioned personal loan products can be availed in both secured (by pledging collateral) and unsecured (without pledging collateral) form. The key difference between the two sub-types is presence or absence of collateral, which has both advantages and disadvantages.

Presence of collateral in a secured deal leads to
  • Advantages like quick attention, high credit range, low APR, multiple rate plans and payback methods and negotiable loan terms and conditions
  • Disadvantages like clientele limitation (credit for homeowners and property owners only), slow approval procedure (due to property evaluation procedure) and repossession threat (in case the borrower fails to payback)

Absence of collateral in an unsecured deal leads to
  • Advantages like no time-consuming property evaluation procedure leading to less paperwork and quick loan approval. It also guarantees that repeated defaults – accidental, incidental or intentional – or non-payment will not lead to repossession of a precious asset
  • Disadvantages like limited credit range, comparatively high APR, fixed rate plan and payback method and non-negotiable loan terms and conditions
Based on the above-stated advantages and disadvantages, it is clear that secured type of personal loans is most suitable for ‘small and short-term’ monetary requirements, whereas, unsecured type is most suitable for ‘big and long-term’ monetary requirements.

Online personal loans come well equipped with attractive offers. However, a thorough evaluation of the market trends is recommended, as loan terms and conditions vary from lender to lender.

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