If your financial situation is tight, consider applying for a personal loan. In their YouTube video, “Personal Loans Explained,” Darlington Academy detailed how personal loans work. They first defined a personal loan by letting viewers know it is the experience of borrowing a specific amount of money for a specified period.
The personal loan process implies the promise that the borrower will return the money, with added interest, to the lender by a specific deadline.
Information About Loans
The lender of the money makes a profit on the amount loaned by charging the borrower a fee and charging interest. According to the video, personal loans typically range from $100 to $50,000. The borrower must prove to the lender that they can repay the money. Therefore, the lender can investigate the borrower’s financial status and credit score.
How Loans Are Paid Back
Sometimes, the borrower must “secure” the loan by promising to give the lender an asset if they don’t pay the money back. This asset is referred to as collateral. The most common example of this type of secured loan is a car loan, which would use the car as collateral. The video advises people considering personal loans not to take a loan unless they are sure they can pay the money back.
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