A personal loan is a great way to keep yourself going until your financial situation improves. A personal loan is obtained from financial institutions such as your local bank or a building society, and they usually do not question the reason behind your borrowing the funds. You are basically free to use the cash gotten from a personal loan as you wish. It does not matter if you are using it to refurbish your home, go for a holiday in the Bahamas or merely to fund your child’s education. You are usually allowed up to $20,000 or more, depending on your credit history. Personal loans are great for emergency purposes - but do beware the high interest rates involved. The more you borrow, the higher the interest rates incurred. The rates range from a low 8% to an extremely high 20%. Before signing on the dotted line, do ensure that you get the facts straight, especially those pertaining to the Annual Percentage Rate (or APR) so that you do not find yourself burdened with high repayments in the near future.

Secured personal loans can be applied by putting up your asset such as your home as collateral. Should you fail to pay off the loan, you will be forced to sell your house. On the other hand, you don’t have to put up anything in order to obtain an unsecured loan but you face the risk of being blacklisted if you do not pay on time.

adminPersonal Loans18 May, 2008No Comments

Taking out a personal loan is a way of borrowing money from a bank, building society or other financial service provider. You can usually borrow up to £15,000 for a period that can range from six months to 10 years. Generally speaking, the more you borrow, the lower the interest, but rates vary from around 8% to 20%, so you’ll need to shop around. This is made more difficult by the fact that it is not easy to compare personal loan rates because different lenders calculate the total cost of the loan (known as the APR or annual percentage rate) in different ways.

Loans can be secured or unsecured. Secured loans are usually tied to your house - which means if you default, you may need to sell your house to repay the loan. Unsecured personal loans are not tied into anything, but if you don’t make the repayments, the bank will blacklist you and you may find it difficult to take out other financial products, such as credit cards or a mortgage. Loans for specific items such as new cars are also available, often with lower interest rates. If you’re taking out a loan for a car, tell your lender.

adminPersonal Loans7 Mar, 2008No Comments

Unsecured personal loans are loans which are not secured against the assets of the borrower. The lender has no rights to the assets of the borrower in the event of the borrower defaulting on repayments of the loan.

However, if the borrower does default, the lender may sue for repayment, which may in the end mean that the borrower must sell assets in order to repay the loan.

Because the lender has no security, the interest rate (APR) charged will almost certainly be higher than for secured loans.

adminPersonal Loans7 Mar, 2008No Comments