Personal Loan

• Definition: An unsecured loan granted based on your creditworthiness, without the need for collateral.
• Purpose: Can be used for various personal expenses like travel, education, or medical bills.
• Interest Rates: Generally higher than secured loans due to the absence of collateral.
• Approval Process: Typically faster, often requiring minimal documentation. Approval mainly depends on credit score and income.
• Repayment Terms: Fixed repayment schedule, usually over 1 to 5 years.
• Risk: Higher risk if you fail to repay, leading to a negative impact on your credit score.

Loan Against Security

• Definition: A secured loan where you pledge an asset (like property, stocks, or fixed deposits) as collateral.
• Purpose: Commonly used for larger expenses, investments, or business needs.
• Interest Rates: Generally lower than personal loans since they are secured by collateral.
• Approval Process: May take longer due to the valuation of the pledged asset and additional documentation.
• Repayment Terms: Flexible repayment options can vary based on lender policies.
• Risk: If you default, the lender can seize the pledged asset.

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