Understanding personal loans is an essential part of the lender-borrower relationship. For Halle who wants to apply for a loan, knowing the right type of finance for her needs is essential. This could be the difference between her applying for a long term loan or an instant loan which she can repay within a month.
Types of Loans:
- Short Term
- Long Term
- Home Loans
- Vehicle Finance
- Payday Loans
There may be limits on how the loan can be used, depending on the type of loan applied for.
Affordability is quite important because it is the main factor that lenders use to decide on a loan application.
Various Lenders
In the past, banking institutions were the only ones that individuals could approach for finance. With changes to the financial industry, there have been more lenders entering the industry. This has created even more opportunities for new entrants to the market. Borrowers have options. Online lending has also taken off with the digital evolution taking over the financial sector.
Terms and Conditions
When applying for a personal loan, Halle has to consider that there are some conditions that apply. So if she is under the age of 18, she may have to get consent from her parents or guardians.
Range of Loan Amounts
Depending on the loan, individuals can expect finance amounts ranging from R500 to as much as R150 000.
Interest rates are also a major part of the process of understanding personal loans. The rates that a borrower gets are usually a factor of their credit history as well as their affordability.
Application Processes have become much easier with the advent of technology. Applications can be done online nowadays, saving not only time, but also money that would have been spent on transportation to the branch.
