There are two types of personal loans — secured and unsecured loan
This is to ensure that those who intend to borrow are able to pay their debts
Because of this, the cost of borrowing for an unsecured loan is higher because the lenders have higher risk in loaning. Although the borrowers will not give any kind of property in their loan, this does not provide them safe in case they do not repay their debt in full. The torturer can still bring the case to court to sell of the creditors his property to recover any losses. The interest rate for a personal loan can makategorya in two main types, fixed and variable. Before taking a personal loan, should the first note of the borrower what interest rate they want to pick up.
The personal loan in the Philippines is however more towards fixed interest rate
The fixed interest rate is an interest rate that remains the same throughout the term of the loan.
The rate will remain the same despite changes in the market
While a fixed interest rate loan will protect the borrower from the movement of interest rates, the amount of the payment will have to pay accordingly to agreement of the loan until paid in full loans. Therefore, if a borrower is willing to pay the extra payment, he can charge additional fees. A variable interest rate personal loan has an interest rate that changes, depending on the rates in the market. The advantage of taking this particular type of personal loan is a borrower could benefit when the market rates are low. However, it can be bad when the rate in the market will increase, as the borrower will pay more interest