Personal loans : Loans for any personal requirement
By: bernard | Posted: 27th April 2007
Personal loans are the only loans that can take care of most financial requirements – both long-term and short-term – under the secured and unsecured sub-categories.
Many lenders offer a wide range of personal loan products. Currently, the most common ones are bad credit loans, business loans, car loans, career development loans, cosmetic surgery loans, debt consolidation loans, education loans, holiday loans, homeowner loans, home improvement loans and wedding loans.
Most of the above-mentioned personal loan products can be availed in both secured (suitable for big and long-term monetary requirements) and unsecured (suitable for small and short-term monetary requirements) form. The key difference between the two sub-types is the presence or absence of collateral, which has both advantages and disadvantages.
•Secured personal loans – credit assistance against collateral
•Unsecured personal loans – credit assistance without collateral
The advantages of presence of collateral in a secured deal are quick attention, high credit range (as high as £250,000), competitive low APRs, multiple rate plans, diverse payback methods and flexible loan clauses.
But, the disadvantages are credit for homeowners and property owners only, slow approval procedure and additional paperwork – due to property evaluation procedure, and repossession threat – in case the borrower fails to payback.
The advantages of absence of collateral in an unsecured deal are no collateral, credit for all (tenants, homeowners, property owners and students as well), no time-consuming property evaluation procedure, less paperwork, quick loan approval and no repossession threat – in case the borrower fails to payback.
But, the disadvantages are limited credit range (typically between £500 and £25,000), high interest rates (typically between 7.9% and 41%), fixed rate plan and payback option, and preset loan terms and conditions.
Please note: To avail the benefits of personal loans – secured or unsecured – the applicant must be a UK resident and over 18 years of age. In addition, the approval of the loan amount is subject to the lender’s credit policy, and is in proportion to the borrower’s credit history, employment status, debt to income ratio (DTI = Debts/Income) and the value of the pledged collateral (in case of the secured credit only).
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry.
He has done her masters in Business Administration and is currently assisting Chance4finance as a finance specialist. To find a personal loans,that best suits your needs, visit chance4finance UK.
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Tags: loan terms, high interest rates, debt consolidation loans, home improvement loans, business loans, bad credit loans, car loans, education loans, unsecured personal loans, flexible loan, homeowner loans, holiday loans, approval procedure, surgery loans, property evaluation, quick loan approval, evaluation procedure