With the popularity of Personal Loans escalating persistently in the loan market today, I’m fairly sure that you are more or less aware of what these loans actually entail˳ Personal Loans are fundamental loans taken to simplify or assist you in your financial lifestyle˳ With the standards of living constantly on the rise on one hand and your stagnant monthly paycheques on the other, meeting day to day demands too becomes dicey˳ A Personal Loan is that Good Samaritan that can either serve as a necessity or a luxury˳
For example, Personal Loans can support necessities like household bills, overdue rent, children’s education and furthermore, luxuries like a dream house, the long-awaited car or a needed vacation˳ Personal Loans are all you need when you feel tied down with flat income˳ Therefore, if needed, open your minds to this concept of Personal Loans because simply put – You gain from it!
Personal Loans are of 2 kinds: Secured and Unsecured Personal Loans˳
Secured Personal Loans:
· Secured Personal Loans require any securable collateral to be put up against the loan˳ Collateral can be an asset like your home or automobile˳
· Collateral lowers the risk a lender faces and hence these loans hav low interest rates and flexible repayment terms˳ These niceties vary with the loan amount, credit score, financial standing, etc˳
· A good credit statement can lower the interest while a bad credit can reverse that˳
· For Secured Personal Loans, the loan amount ranges from £5,000 to £75,000 and the repayment period extends from 5 to 25 years˳
· However, any default in your payments leads to confiscation of your collateral˳
· Moreover, many borrowers have no security to offer other than their home and putting your home at risk is not something most people consider˳
Unsecured Personal Loans:
· Unsecured Personal Loans are based entirely on the character and financial capacity of the borrower˳
· For Unsecured Personal Loans no collateral is required and hence these loans are hard to obtain˳ They are ideal for tenants and non homeowners as they have no property to pledge˳
· As there is no security offered, a lender cannot be sure of repayment; hence is under more risk, and therefore the interest rates in this case are higher˳
· For the same reason, lenders limit the value of Unsecured Personal Loans to £25,000˳ The interest too ranges from 7% to 30%˳
· The repayment term for an unsecured loan starts from 6 months and can go up to 10 years˳ Usually, the loan repayment term for an unsecured loan is shorter than that for a secured loan˳
· As the time taken for valuation of collateral is eliminated, theses loans are quicker to obtain and the loan amount is available very fast˳
· As Unsecured Personal Loans are approved solely on the character and repayment capacity of the borrower, bad credit history becomes an obstacle in the process˳
Procedure in approval of Personal Loans:
· Choose a loan with interest rates and repayment terms that suit your economic position˳ Expert advice is better to make yourself aware of all apt loans available˳
· You need to fill out an application form˳ Being brief but clear is generally preferred˳ Easy approval is facilitated if the application form gives explicit information˳
· Submit required documents like credit statement, income statement/proof, etc˳
· Income verification takes place˳ Assets are verified through two months statements˳
· The lender now makes his decision on the basis of the amount, the terms selected, your credit history, etc˳ This process takes 24 – 48 hours˳
Today, Personal Loans are taken without hesitation˳ Because of this popularity of Personal Loans, more and more lenders are emerging, each offering better options than the other˳ Expert advice will help in making decisions˳ Being aware of your financial condition, you can choose your loan options better˳ Thus, the final decision is reserved with you˳ Explore your options and familiarize yourself with the terms and condition of Personal Loans before settling on any one˳ You can apply for these quotes at different loan lenders and thereby compare loans˳ You just need to shop around to find the best deal!
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