Bangalore: With inflation round the corner, many people find it difficult to meet certain needs- which could range from having a brand new car, planning a vacation or purchasing gold. Funds are limited and the only solution people arrive is to apply for personal loans. Personal loans are one of the simplest forms of loans as there is no restriction on the purpose of its use. A personal loan brings flexibility in the nature of spending, but to compensate for this the lenders charge a higher rate of interest. The average interest rates charged for personal loan is in the range of 12-22 percent. Since personal loans do not require any security or supposed assets, the rate of interest charged by banks is higher compared to any other secured loans which are taken against the security of an asset like your home, car, gold or even equities. Before you even avail a personal loan there's one question you need to ask yourself, "Do you really need a personal loan?" Remember one thing, loan may be easy, but it doesn't mean that it is necessarily good. Personal loans can damage your financial goals because this money is not what you earned and you are using it on purchases. Instead of saving you are spending the amount you never earned. Depending on the value of your assets, you may be able to get more money than what you think, but it's best to think carefully about the amount that you borrow so that you don't end up in an uncontrollable amount of debt. Before the banks could provide you the loan they check for the eligibility based on your income, age, and other liabilities. They would also take into account whether you are a salaried person or self-employed. If you pay off your personal loan before the end of the loan's term, you may be charged an early redemption penalty. And this differs from one lender to another. While availing the loan the additional charges that could cost you a lot are the processing fees, prepayment penalty, documentation charges and more. These too could add up to a substantial amount. It is true that personal loans tailor your needs by providing you the funds at the right time, but make sure you weigh the pros and cons of availing a personal loans to avoid having a debt trapped life.