Personal Bank Loan

Introduction

Among the variety of ways people can borrow money in today’s financial world, one of the most traditional methods has and continues to be the personal bank loan. This loan involves the consumer going to the bank, explaining the need for the loan, providing all the necessary application material, and sometimes providing some kind of collateral to secure the loan. The personal bank loan is not used as frequently today, given banks’ interest in protecting themselves. However, they do exist and are provided to better than average credit score customers.

What is a Personal Bank Loan?

A personal bank loan is a traditional loan provided by a bank. They come in two forms: secured and unsecured. Secured loans have some kind of collateral that provides the security for the loan. If the loan is defaulted then the collateral is taken over by the bank to protect its commitment. Unsecured loans have no such collateral. The bank takes on the most risk with this kind of loan since it has no direct recourse if the borrower defaults.

Personal loans are frequently requested to pay for special events, property purchases, school costs, medical emergencies, and debt consolidation. The reasons vary and frequently have to be assessed on a case by case basis.

All banks offer personal bank loans. They are not limited in amount; instead, the bank decides how much risk it wants to take on to meet the consumer’s request. The purpose for the loan is only restricted by the bank and, if provided freely, can be used for any purpose