We all have had some emergency when we needed some liquid cash, or we spotted that household item we have always wished to have, or it’s the odd weekend as the month comes to a close and the cash runs low. Having cash is one of the most securing things in this capitalistic economy we all are in, and as much as money does not make the world go round, it sure is the fuel that makes things run. Cash is, without a doubt, the most sought after ‘commodity’ on the planet, save for life itself. So what do we do when our wallets run short, right when we need the liquid cash?
Personal loans are some the most common small scale financial products that banks and other financial institutions have designed to help clients when the need arises. They play a pivotal role in running the economy by fueling the purchase and sale of commodities, with instant personal loans heading the list of the most sought after financial products. Nearly all financial institutions ranging from banks, saving societies, depository bodies, civic money pools and shylocks have some form of instant personal loans product. Their ease of accessibility and quick arrangement requirements have made them the most popular banking product sought after.
There are two main categories of personal loans, the many product names offered by the different lenders notwithstanding. These are secured personal loans and unsecured personal loans. As the names suggest, secured loans require the borrower to provide some form of collateral as a condition to receiving the loan. However, such collateral requirements are light and easy to get, as they border along salary pay slips, personal guarantors, or even household items, for loans from shylocks. Just as personal loans, the basic framework in the collateral condition is availability and the security demanded is usually not prohibitive in nature.
Unsecured personal loans are the most common of the two. Hundreds of billions of dollars are transacted annually as unsecured loans, making them the highest subscribed to financial product. These fast, easily accessible loans have been designed to come in all forms, shapes and sizes. Loan arrangements such as hire purchase fall in this category as does loans from families, friends, and employers and so on. As has been documented, most unsecured loans are not accounted for in the mainstream economy as the money changes hands with no paper work involved.
Personal loans, either secured or unsecured, carry a relatively higher level of risk. It is therefore very important to check all the borrowing conditions made, especially where the loan is taken from shylocks or civic pools. It is also important to efficiently use the borrowed money and for the reason the loan was taken for in the first place. However, as most people have found out, with good care and financial discipline, personal loans can and do go a long way in fueling the running of the economy and in aiding personal financial freedom.