Getting The Best Deal On Personal Loans
A personal loan is a sum that any adult individual borrows to
fulfill his financial requirements. There are many purposes for
which any individual can take a personal loan. Personal loans
can be used to provide funds to buy a car, pay for your dream
cruise or that remote island escapade, buy a boat, pay mortgage
arrears, finance your home improvement plans, payment of alimony
or paying for credit card bills etc. In fact personal loans can
be taken for most of the financial emergencies you can think of.
There are many banks and financial institutions, which provide
personal loans. All of them have their own terms and conditions.
To get the best deal on your personal loan you must ensure that
you contact and consult as many lending institutions as
possible. Tell them about your financial requirements and
situation. Get quotes from them and check whether you can repay
the personal loan with ease.
The banks will provide you with a lump sum amount when you
complete the formalities of getting the loan. The money can be
used to fund your requirements. The amount banks will recover
from you will include the debt, coupled with the interest
charged on it over the repayment period. The longer the
repayment term the less will be the interest to be paid on the
personal loan.
Personal loans are preferred
due to their flexibility. The two most common types of personal
loans are secured and unsecured personal loans. The option of
secured and unsecured personal loans are linked to the fact
whether you can offer any property or fixed asset as collateral
for the loan. These loans are discussed below in detail.
Secured personal loan A loan secured against some immovable or
movable asset is called a secured loan. These loans are easy to
get since the lending institutions feel comfortable while giving
them. The reason for their comfort is the collateral you
provide. Secured personal loans have lower interests and easy
repayment options. Lending institutions don't hesitate in giving
a large loan against high value collateral. Generally, secured
personal loans are given against house owned by a person, but if
you have put your house on mortgage you can still avail a
secured personal loan against the proportion of the home you
own. Banks and financial institutions often overlook negative
credit ratings, CCJ, defaults or pending debts since they get
collateral for their loan. Secured personal loans are available
to individuals within 30 days of giving an application.
Unsecured Personal Loan In an unsecured personal loan the
amount given by the bank or financial institution is not secured
by collateral. The lending institution gives the loan solely on
the creditworthiness of the person concerned. This type of loan
has a greater element of risk for the lenders, so it carries a
greater rate of interest and is often followed by a through
background check on the financial soundness of the individual.
The loan amount can start from as little as