Individuals borrow a personal loan from a bank. This particular loan is unsecured because it is not backed by collateral. A personal loan is not secured to any assets, and it is not the same as a home or a car loan. Since it is unsecured, the creditor does not have any collateral to auction in the case of default. Due to the greater risk faced by the lender, the interest rates on personal loans are usually higher than other loans.
It can be used to investing in a business, renovate your home, marital expenses, family vacations, education fee, purchase electronic gadgets or home appliances, unexpected medical expenses, or any other emergency, etc.
There are three alternative ways to get a personal loan, which include banks, online lenders, and credit unions. The majority of the banks in Malaysia provide personal loan services. Unlike traditional banks, online lenders offer a simple way to search for personal loans and make a comparison between different lenders. As for credit unions, it is a community credit union that offers loans at lower interest rates and provides more flexibility compared to other loan lenders.
To apply for a personal loan, one must be able to prove that you have a source of regular income. This applies to employees, self-employed business owners, or students. Your employer, credit history, age, occupation, employment, ability to repay the loan, and place of residence are the general requirements that will be assessed by the banks.