Unlike the day to day loans we acquire, personal loans are described as installment loans which
provide a certain amount of money that you’ll be required to pay in a certain time frame.
Usually, the time period could stretch from a year to a decade with a specific interest rate
which stays constant throughout the payment period. Requirements for a personal loan are;
Personal information: You will be required to provide your personal information so that the
loaner can always keep track of you and also become well acquittanced with the person the
loan is being given.
Financial information: A background check on your financial stand is necessary and in most
times, a lender is inclined to run a hard credit check on you so as to establish your ability to pay
Desired amount: Once stage one and two have been accomplished, we move on to stage three
where you state the desired amount you would love to be loaned. The conclusion drawn is
usually dependent of your financial stand.
Once the three stages are concluded, an agreement shall be drawn in between the lender and
the borrower which will include the interest rate, loan amount and the terms under which the
two parties shall work.
Therefore, unlike the traditional loans that we are accustomed to, personal loans base on your
financial muscle and not collateral security which a client may not be able to provide.