New Delhi, March 6 -- A personal loan is quite different from other variants of loans. Unlike other loans such as a house loan or a car loan,a personal loan is an unsecured loan. Rate of interest charged on personal loan is usually higher than that of other loans and it does not require a collateral from the borrower.

I.No collateral required: Typically, lenders (which could be banks or non banking financial corporations) require collateral before they grant loan to an applicant. However, banks do not require collateral in case of personal loans which areunsecured and free of security.

II.Rate of interest: Another key characteristic is that these loans have a higher rate of interest (10-24 percent) unlike secured loans which have a lowe...