A personal loan is usually an unsecured loan render to an individual without any collateral.  Since it is an unsecured loan, the approval is solely depends on borrower’s credit rating.  If you credit rating is good, that means you are not bankrupt nor you default your credit card payment or mortgage, you will not have a problem secure a personal loan.

If you are bankrupt or having a bad payment record in your credit card or mortgage, it will be difficult to secure a personal loan as the bank sees this as high rick business transaction.  Even if you may get it, be prepared to pay high interest rate and the loan amount will be very low.

Characteristics of Personal Loan

-          No Collateral Needed – you don’t need to pledge your asset to the bank

-          High Interest – higher then housing loan but less than credit card advance

-          Short Repayment Term – usually less than 3 years

-          Low Loan Amount – loan amount depending on your salary earned.

-          Interest are not Tax deductable – unlike your housing loan, interest is tax deductable.