What Are The Risks With A Personal Loan?
They can be expensive and they lack flexibility. The main risk is though is that you cannot keep up the loan repayments. Some personal loans are also secured – usually against your home. This means that, if you do not keep up the payments, the lender can sell your home to recover the loan. Most personal loans are unsecured but if you do not keep up the payments the lender can take you to court. The court may then order you to pay off the loan in instalments but you could be forced to sell your possessions to recover the loan. This may affect your ability to take out a loan again by running up a bad credit rating. You will probably find it hard to borrow elsewhere once court proceeding are brought against you.
