Personal Loans: Financial Solutions Personalised For You!
By Marsha Claire
Whether it's funding your necessary needs like overdue bills, credit card dues, pending rent, household repairs and medical emergencies or even extravagant spends like family holidays, Christmas redecorations, a new sports car or simply shopping sprees, Personal Loans are here to help. Although the name clearly spells out that Personal Loans can be used to fund any of your personal expenses, we often mistake loans to be solutions that must be taken only when in a financial crisis. So, let's expand boundaries and allow Personal Loans to take care of everything.
Personal Loans are ideal financial solutions that are normally sought when we find that our limited incomes can no longer cover all the expenses we meet. Such situations are not rare occurrences but often meet us head-on on a daily basis. Personal Loans can also assist us in paying up tuition fees, buying a home, starting a business, etc. Personal Loans form a very broad category and are therefore categorized depending on the purpose they are taken for. A Personal Loan taken to buy a house is called a Home Loan; when used to pay for education, it is called an Education Loan; when used to kick start a business, it is usually known as a Business Loan, etc.
Further, each of these categories of Personal Loans can be classified into Secured Personal Loans and Unsecured Personal Loans, depending on a borrower's financial standing and affordability.
Secured Personal Loans:
Here, you will be required to pledge any asset that has value compatible with the loan amount. This asset is termed as collateral and is usually offered in the form of your house, your automobile, your current bank account, etc. Collateral remains in your lender's possession until you repay the entire amount. If you fail to keep to the contractual repayments, in the worst-case scenario, your lender repossesses your collateral.
Features of Secured Personal Loans:
Presence of collateral reduces interest charged on the loan, thereby reducing your overall cost.
Furthermore, these Personal Loans have repayment terms that vary between 5 and 25 years – a long term that stretches your repayments, making them smaller in the long run.
Secured Personal Loans normally approve amounts ranging from £5000 to £75,000. This limit is extended depending on the value of your collateral, your current financial standing and your credit history.
Credit history may not be a very critical factor since presence of collateral nullifies negative credit, if any.
Unsecured Personal Loans:
These loans do not entail any guarantees or collateral. They are simply approved after evaluating your credit history and the repaying capability you portray. These loans are ideal for non-homeowners and others who choose not to put their assets at risk.
Features of Unsecured Personal Loans:
Although collateral may be considered an unnecessary aspect here, it's absence has a downside too.
Higher interest rates.
Shorter loan terms – up to 10 years only. Your payments must now be paid in a shorter period of time, making your installments larger.
Moreover, loan amounts are also limited to £25,000.
Necessarily excellent credit records.
Personal Loans have such a huge market and so many lenders to choose from that taking a loan can sometimes become quite tiresome. This is why the online process is fast gaining on. Online applications save you the time, reduce your paperwork and give you a wider variety to choose from. Instead of standing in queues and signing endless forms, this process is much more simpler and definitely more convenient.
Now that information is at your disposal, it's up to you to choose a lender and the right loan – and get the Personal Loan tailored down to your specific need. With Personal Loans, what you want is what you get, provided you have the need and capacity to repay the loan within the specified term.
About the Author
Marsha Claire is offering loan advice for quite some time. To find Personal Loans, cheap personal finance, cheap personal finance UK, cheap small business finance, cheap car finance, cheap car finance UK in uk please visit http://www.cheapfinanceuk.co.uk
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