What are Personal Loans?

Personal loans are a type of loan best suited for working individuals in Sweden, who need money to address added essential expenses. Although personal loans are also one kind of a debt, personal loans are best viewed as financial transactions entered by two parties: the borrower, the individual who acquires the loan, and the lender, which is any certified financial institution like a bank or a lending company.

In the personal loans set-up, the borrower, who receives a principal or an amount of money from the lender, agrees to return the principal to the lender in accordance with the specified interest rate and with the payment scheme upon which both parties agreed. In simpler terms, the borrower will get a certain amount of money and will return the money plus interest in the period and manner.

Personal Loans: Interest Rates

The borrower is charged a small fee, called the interest, for getting the personal loans. The interest rate for personal loans usually depends on the kind of lending institution giving the loan. Most corporations that offer personal loans also consider other factors, such as the annual income of the borrower, the loan amount, the credit history of the borrower, the acceptable interest rate as dictated by law.

The best or leading lending banks or companies usually offer personal loans with interest rates of 14.5 percent to 19.25 percent. Multi-national financial institutions also have personal loans packages with interest rates of 15 percent to 23 percent. Smaller lending companies offer personal loans packages with interest rates of 15.5 percent to 28 percent. Thus, any borrower can find the loan package and payment scheme that best corresponds to his needs and financial capability.

There is a much bigger choice of loans online. There are some financial portals in Sweden, like PrivatlÄn24.com, where you can compare loans from many lenders with different terms and interest rates. Before applying for personal loans though, it is also always best not only to look into the interest rates but also the credibility of the company, and their terms and conditions. The best companies always reveal their terms and fees.