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  Listed Article

  Category: Articles » Finance » Loans » Article
 

Your two choices when getting a loan




By Mark Lambie

When it comes to getting a UK personal loan you have two choices. You
can choose to get an unsecured loan or you can choose to get a secured
loan.

An unsecured loan is simply a loan you get based on your good name
and your credit rating. Often the interest rates are low the higher on an
unsecured loan and on a secured loan because the risk is higher to the
lending institution. If, for some reason, you are unable to pay back the loan
and the lending institution does not get any money back. However, your
good name and your credit rating are potentially ruined.

On the other hand, a secured load is a low you get when you put up some
assets. The advantage of a secured loan is that you often get more money
at a lower interest rate for longer repayment period that you would with an
unsecured loan. This is because you have some assets to backup your
loan. The lending institution prefers this kind of loan because if you find
yourself unable to make payments, they can see your assets as an
alternative form of payment. Because the risk to them is diminished they
are able to provide you with more attractive loans at a better rate.

You might think of a mortgage as a secured loan. The bank lends you
money to buy a house and they use the house as a way to back up the
loan. If you do not make your mortgage payments, the bank can seize
your home.

Or you can think of a secured loan as a pawn shop that lends you the
money you want but lets you still use the goods you pawned!

So which one is the right one for you? It's a tough decision to make. In
most cases, a secured loan will get you a better rate, so you may prefer
that.

However, perhaps you don't have any assets available, or you don't want
to risk the seizure of certain assets if you are unable to make payments. In
this case, you may not mind paying a little more for the benefit of having
an unsecured loan.

Both unsecured and secured loans are good options to have when you
are doing your financial planning. You can use them to consolidate your
outstanding bills, leverage your house investments, or get the things you
need and want. And, with the choices between unsecured and secured
loans, you have the benefit of being in total control of your financial
destiny!

 
 
About the Author
Mark Lambie is the founder of Loan Source, a website for UK residents seeking secured loans. Visit

our website today for a free Secured Loan quote and find

out how much we can save you.

Article Source: http://www.simplysearch4it.com/article/18533.html
 
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