Written By jeremy hunk on Sunday, April 29, 2007 | 8:23 PM

Have you ever stopped in your tracks while buying that perfect dress or suit? Thought twice before taking a deserved vacation? Or put your personal wants and dreams aside simply because you thought that the money was not enough? Stop right now and think again! Besides spending money on household necessities and bills, indulging yourself in a little luxury can sometimes be important and not always unnecessary. But when tied down with a flat income, luxuries take those back seats that never ever move ahead. Personal Loans are here to help.

Personal Loans are personal financial saviours that can liberate us from those limited spendings. Personal Loans can support necessities like store and credit card bills, loan repayments, groceries, overdue rent, children’s education, etc. But for those of us who need a little bit of extravagance, Personal Loans also cater to buying that dream house, the long awaited car, taking a deserved vacation or joining a gym. Personal Loans are perfect remedies that can provide not only for luxuries but also for everyday requirements. Let’s talk a little more about Personal Loans.

Personal Loans are of 2 kinds: Secured and Unsecured Personal Loans. Secured Personal Loans: · Secured Personal Loans require any securable collateral to be put up against the loan to assure the lender of repayment. Collateral can be in the form of your home, automobile, jewellery, etc. · For Secured Personal Loans, the loan amount ranges from £5,000 to £75,000 and the repayment period extends from 5 to 25 years. · Collateral lowers the risk a lender faces and hence Personal loans have low interest rates and flexible repayment terms. These niceties vary with the loan amount, credit score, financial standing, etc. · Any default in your payments leads to confiscation of your collateral. · Moreover, many borrowers have no security to offer other than their home and putting your home at risk is not something most people consider.

Unsecured Personal Loans: · Unsecured Personal Loans are based entirely on the apparent repaying capacity and financial standing of the borrower. · As there is no security offered, a lender cannot be sure of repayment; hence is under more risk, and therefore the interest rates in this case are higher. · For the same reason, lenders limit the value of Unsecured Personal Loans to £25,000. The interest too ranges from 7% to 30%. · The absence of collateral makes Unsecured Personal Loans hard to obtain. They are ideal for tenants and non homeowners – those without property to pledge. · The repayment term for an unsecured loan starts from 6 months and can go up to 10 years. Usually, the loan repayment term for an unsecured loan is shorter than that for a secured loan. · As the time taken for valuation of collateral is eliminated, theses loans are quicker to obtain and the loan amount is available very fast.

As you have seen, the presence of collateral makes the big difference. This is what makes secured loans more practical – it’s feasibility. Besides collateral, another important aspect is credit history. For secured and unsecured personal Loans, good credit history can lower the interest while bad credit can reverse the situation. But in case of Unsecured Personal Loans, as they are approved solely on the character and repayment capacity of the borrower, bad credit history becomes an obstacle in the process.

Personal loans are ideal fiscal solutions to your problems. They are flexible and can thus suit your demands, your current credit situation, your loan amount, interest rate, repayment term, etc. The best thing about them is that Personal Loans are specially customized to your need. The only part that you have to be proactive about is choosing your loan. To get the best opportunity, get as many quotes from as many lenders as possible. Get yourself familiar with the interest rates, collateral requirements and documents needed. Be vigilant about the fine prints, the lender fees and the hidden costs. If in doubt, do not hesitate in taking the help of legal experts. There’s a financial solution for everyone. Go get yours today!

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