A loan is an arrangement where money is lent by one person (the lender) to another (the borrower); when money is lent in this manner, the debtor must abide by the repayment terms set by the creditor. Whilst just about anything, product or service can be lent out; the information below focuses on financial arrangements only. Loans are required to be paid back and this is normally within a period set at the commencement of the contract; this is usually in regular monthly installments.
When debts are repaid a charge is added to the sum owed called 'interest' which is how the lender can gain from the service he has provided. It is not uncommon for a company to have a policy where the interest is front-loaded and paid first; then the capital sum is paid afterwards. Others will repay the debt in equal installment with the interest as part of this amount.
The primary use of a financial institution is to arrange finance but they do have many more functions. Bank loans and credit are one way to increase a person's or company's money supply; although other money raising methods do exist.
A mortgage is a very common type of debt and the primary method used by individuals to purchase a house however with this type, the money advance can only be used for the purpose for which it was intended. The financial institution is given security however; in this case the title to the house, until the mortgage is paid off in full. With this type of loan, should the borrower fail to make payments on the loan or default, then the bank or other financial institution has the right to sell the property; to recover sums owing to them, they may place it an auction.
Even small loans can be secured but this generally only happens when a person has a poor credit history which could be the case of a person buying a car; in much the same way as a mortgage is secured by the house itself. The duration of the loan period is often considerably shorter, usually corresponding to the useful life of the car; usually lasting no more than 5 years, maximum.
Unsecured loans are available from financial institutions under many different guises or marketing packages; credit cards, bank overdrafts and other forms of finance all fall into this category. The interest rates applicable to these different forms may vary depending on the lender, the borrower and the type of credit supplied.
In some countries, predatory lenders are called loan sharks and it is where they supply money at high interest rates with the sole intention of gaining control over a person. Credit card companies in many countries are often accused of a similar practice where they lend money at very high interest rates and make money out of frivolous extra charges. Try to remember what has been written here and you might not have too many problems.
source : http://ezinearticles.com/
Monday, March 31, 2008
Tuesday, March 4, 2008
Unsecured Loans Benifits: Without Collateral
One wonders if all the benefits unsecured loans provide really make up for its drawbacks. In this article we analyze both pros and cons of Unsecured Loans and explain why in some situations unsecured loans are the best choice.
As with most things, what may be useful for some people can be useless for others and what is disposable for some people can sometimes be essential for others. This is also true as regards to loans. Unsecured loans can sometimes be helpful and sometimes they are the only choice some people have to get finance.
Any Purpose?
When financial institutions want to promote unsecured loans, they usually claim that you can use an unsecured loan for any purpose. The truth is that there are secured loans that can also be used for any purpose. A home equity loan does not have a specific use and the money you get can be used for whatever you want. Thus, the "any purpose" benefit does not seem to be such an advantage.
No Collateral
The other common claim is that since unsecured loans do not require collateral, the risk of repossession does not exist. This is actually true but what they forget to state is that the lender is still entitled to take legal actions to recover what he has lent. Collateral is only a guarantee, it gives the lender several rights over the asset in case there are more creditors willing to recover their money. All the other debtor’s assets will be sold before in order to pay other debts.
Loan Amounts
It is a common belief that one can borrow more money with a secured loan than with an unsecured loan. This is only true in some cases. With a secured loan, one can borrow as much money as the asset’s value can guarantee. However if someone has a good credit score and many assets, all of this would be "guaranteeing" any loan he might request and thus, he can get a higher amount by applying for an unsecured loan. This is especially true when it comes to unsecured business loans.
All the above is also applicable to loan’s length. Loan lenght is also determined by the risk involved for the lender and someone with many assets and good credit, even if he does not offer an asset as collateral, is a low risk prospect.
Tenants And Non-Homeowners
As stated at the beginning of this article, unsecured loans are sometimes the only choice some people have in order to get finance. Tenants and Non-homeowners can not offer an asset as collateral and thus, have no other choice but to apply for an unsecured loan.
Due to the highly competitive nature of the unsecured loan market, the interest rate charged for unsecured loans has been decreasing over the years and at the present time unsecured loans’ interest rate does not differ much from secured loans’ rate. So, it is not strange that many homeowners are opting for unsecured loans and holding back to their properties in case they need to request a secured loan in an emergency situation.
Source:-http://www.buzzle.com
As with most things, what may be useful for some people can be useless for others and what is disposable for some people can sometimes be essential for others. This is also true as regards to loans. Unsecured loans can sometimes be helpful and sometimes they are the only choice some people have to get finance.
Any Purpose?
When financial institutions want to promote unsecured loans, they usually claim that you can use an unsecured loan for any purpose. The truth is that there are secured loans that can also be used for any purpose. A home equity loan does not have a specific use and the money you get can be used for whatever you want. Thus, the "any purpose" benefit does not seem to be such an advantage.
No Collateral
The other common claim is that since unsecured loans do not require collateral, the risk of repossession does not exist. This is actually true but what they forget to state is that the lender is still entitled to take legal actions to recover what he has lent. Collateral is only a guarantee, it gives the lender several rights over the asset in case there are more creditors willing to recover their money. All the other debtor’s assets will be sold before in order to pay other debts.
Loan Amounts
It is a common belief that one can borrow more money with a secured loan than with an unsecured loan. This is only true in some cases. With a secured loan, one can borrow as much money as the asset’s value can guarantee. However if someone has a good credit score and many assets, all of this would be "guaranteeing" any loan he might request and thus, he can get a higher amount by applying for an unsecured loan. This is especially true when it comes to unsecured business loans.
All the above is also applicable to loan’s length. Loan lenght is also determined by the risk involved for the lender and someone with many assets and good credit, even if he does not offer an asset as collateral, is a low risk prospect.
Tenants And Non-Homeowners
As stated at the beginning of this article, unsecured loans are sometimes the only choice some people have in order to get finance. Tenants and Non-homeowners can not offer an asset as collateral and thus, have no other choice but to apply for an unsecured loan.
Due to the highly competitive nature of the unsecured loan market, the interest rate charged for unsecured loans has been decreasing over the years and at the present time unsecured loans’ interest rate does not differ much from secured loans’ rate. So, it is not strange that many homeowners are opting for unsecured loans and holding back to their properties in case they need to request a secured loan in an emergency situation.
Source:-http://www.buzzle.com
Monday, February 25, 2008
Different Between Secured And Unsecured loans
One comes to hear about terms like unsecured and secured loans if he is hunting for a loan. Do you know the difference? Do you know which type of loan that you need? Is the type of loan matching your requirements known to you?
It's difficult many times for the average consumer to wade through all of the terminology and have a real idea of what they need. However, secured as well as unsecured loans can be broken down into simple terms for you.
Secured and Unsecured Loans: What is What?
No kind of security is required for unsecured loans, not even your home. With these loans, the lender believes that you will be able to repay the loan amount as promised. Unsecured loans are not difficult to come by, but you do have to have a good credit history, a low debt to income ratio, and you need to be able to provide your financial stability.
There is a list of types of unsecured loans such as personal loans, student loans, personal lines of credit, and even some home improvement loans.
In contrast, the lenders require you to secure the loan with something , such as his/her home or car. What this means is that you are providing collateral to the lender, which means if you don't pay they have rights to this object. Secured loans are more common as many people don't have the credit or the funds to get an unsecured loan and for many these loans are more appealing because they feature lower interest rates.
These loans provide security to the lender in the fact that you will repay. Thus they feel comfortable. Some examples of secured loans are home equity loans, home equity line of credits, auto loans, boat loans, home improvement loans, and recreational vehicle loans.
Suitability of the loan favorable to you is directly proportional to the kind you are looking for. If you just need a personal loan for a couple thousand dollars to pay off a couple medical bills you may be able to do an unsecured loan if you have a decent credit history and you have a low debt to income ratio.
Taking a secured loan is the best option if you want to buy a home. This doesn't mean that you need to put up collateral to buy the home, the home is the collateral. What this means is that if you don't pay on the loan than you lose the home.
Whether you want a new car or a used, the same holds true for a car loan. When you buy the car with the loan you are securing the loan with the car, agreeing that if you don't pay the loan you will have the car turned over to the lender.
Secured and unsecured loans can lend themselves to serve to different things. In most cases those life changing purchases such as homes and cars are secured and everything else may fall under unsecured if you have the credit history to back it up. It goes without saying that there exists pros and cons to both these types of loans. You have to choose the best suitable.
Source:-http://www.freelance-articles.com
It's difficult many times for the average consumer to wade through all of the terminology and have a real idea of what they need. However, secured as well as unsecured loans can be broken down into simple terms for you.
Secured and Unsecured Loans: What is What?
No kind of security is required for unsecured loans, not even your home. With these loans, the lender believes that you will be able to repay the loan amount as promised. Unsecured loans are not difficult to come by, but you do have to have a good credit history, a low debt to income ratio, and you need to be able to provide your financial stability.
There is a list of types of unsecured loans such as personal loans, student loans, personal lines of credit, and even some home improvement loans.
In contrast, the lenders require you to secure the loan with something , such as his/her home or car. What this means is that you are providing collateral to the lender, which means if you don't pay they have rights to this object. Secured loans are more common as many people don't have the credit or the funds to get an unsecured loan and for many these loans are more appealing because they feature lower interest rates.
These loans provide security to the lender in the fact that you will repay. Thus they feel comfortable. Some examples of secured loans are home equity loans, home equity line of credits, auto loans, boat loans, home improvement loans, and recreational vehicle loans.
Suitability of the loan favorable to you is directly proportional to the kind you are looking for. If you just need a personal loan for a couple thousand dollars to pay off a couple medical bills you may be able to do an unsecured loan if you have a decent credit history and you have a low debt to income ratio.
Taking a secured loan is the best option if you want to buy a home. This doesn't mean that you need to put up collateral to buy the home, the home is the collateral. What this means is that if you don't pay on the loan than you lose the home.
Whether you want a new car or a used, the same holds true for a car loan. When you buy the car with the loan you are securing the loan with the car, agreeing that if you don't pay the loan you will have the car turned over to the lender.
Secured and unsecured loans can lend themselves to serve to different things. In most cases those life changing purchases such as homes and cars are secured and everything else may fall under unsecured if you have the credit history to back it up. It goes without saying that there exists pros and cons to both these types of loans. You have to choose the best suitable.
Source:-http://www.freelance-articles.com
Monday, February 18, 2008
Instant Decision Unsecured Car Loans
If you were under the impression that instant decision unsecured loans can't be approved with bad credits. I guess you are wrong, read on to find out why?
Choosing a right instant decision personal loans and settling down with the most reliable lender is quite an uphill task. Not until you opt for an online route for your instant decision personal loans for tenant with bad credit. Save both your time and money and ease your task of searching a befitting Instant Decision Personal Loans Unsecured Car Loans for tenants with bad credit.Compare personal loans unsecured with bad credit!
A volley of personal loans unsecured with bad credit may be a difficult choice. Always learn to compare your loans with other competitive lenders on the basis of its Annual Percentage Rate(APR), tenure of repayment and down payments to be made if any. There are loan calculators available which helps you decide on which loan suits your pocket better.
Instant decision Unsecured car loans!
Good credits or bad credits instant decision unsecured car loans cater all. If you are looking out to fund your cars without taking any risk, you have a befitting unsecured car loan option. Instant Decision Personal Loans Unsecured Car Loans for tenants with bad credit is your apt solution to all your needs.
Add wheels to your car dreams. You have a dream and unsecured car loans will bring it into reality. What is more important is that, your unsecured car loans are approved with instant decision and a tenant with bad credit can still qualify for such loans.
Not to forget, interest rates on tenant loans with bad credit are comparatively on a higher side as against the secured loans or loans with good credits. However, you avoid the risk of staking your collateral in case you fail to repay and your security such as a home or property will serve as a lien between you and your lender.
What helps the unsecured or tenant loans’ get approved with instant decision?
Absence of Collateral: Yes, it is indeed the absence of collateral that is conducive to instant decision on unsecured or tenant loans with bad credits. Absence of collateral verification saves on your precious time and you don’t face any more bank delays.
That’s good news for you! Always ensure that your loan decisions are not taken in haste instead consider Instant Decision Personal Loans Unsecured Car Loans advice from the online professionals without incurring any expenses.
Seek advice and learn how to negotiate on your instant decision loan quotes. Just plan out your repayment terms and strictly adhere to it. If not, you will have to face the legal proceedings carried out by your lender. Online instant decision personal loan lenders run errand for you and just get your loans approved at your finger tips, with a click!
Source:-http://www.articlesalley.com
Monday, February 11, 2008
Benifits Of Secured Loans
Unsecured loans are available from a wide range of lenders these days, and these loans are available to both homeowners and non-homeowners. However, you will generally need to have good credit to qualify for an affordable unsecured loan, as most lenders will not take the risk of offering unsecured finance to someone that has had credit problems in the past. If you do have good credit then you can enjoy a choice of unsecured loans, and the good news is that rates have started to come down on these loans following the Bank of England interest rate cut in December.
There are a number of benefits to consider when it comes to unsecured loans, and this includes:
1. An unsecured loan is not secured against any asset and is instead based on trust and contract. This means that if you do fall behind on repayments - although this is not advisable due to the effect it will have on your credit - you will not be risking losing your home or any other asset.
2. You do not have to be a homeowner in order to qualify for an unsecured loan, which means that you can opt for this type of loan even if you are living with family or renting. This makes this type of loan more accessible to those with a decent credit rating.
3. With unsecured loans that repayment terms are shorter than with secured loans, and this means that you will be free of debt more quickly than you would be with a secured loan. Repayment terms can vary depending on which lender you choose, with terms ranging from one to ten years available, with the norm being around one to five years.
4. Unsecured loans are quick to process, as there is very little in the way of checks to carry out. There is no need for a property evaluation, and the only details that you will need to confirm are details such as your income. This means that you can get your hands on the money that you need more quickly.
5. You can enjoy a wide choice of lenders when you opt for an unsecured loan, ranging from High Street banks to Internet only lenders. This increased choice makes it easier to find a loan and interest rate that suits your needs.
Source:-http://ezinearticles.com
Tuesday, February 5, 2008
Secure Way To Cover Your Expenses: Unsecure Loans
The growing debt culture in the UK is not a new phenomenon. Last several years have registered a conspicuous growth in the overall personal debts in the country. There are a number of borrowing options available in the market – right from credit cards, store cards to big asset based loans. The attitude of a common man is to ‘borrow now and think later’. This careless attitude is the reason for financial instability creeping in the lives of many Brits.However, loans are never bad; rather they help you in adverse times. In the absence of collateral, people see unsecured loans as a secure way to cover up their extra expenses. They use such loans for a variety of reasons like car purchase, home improvement, shopping, holidaying, debt consolidation, payment of tax bills, etc. There are many reasons why these loans have gained a huge popularity among the borrowers. The foremost thing is that no one wants to risk his hard earned property to get a loan. People pledge their homes only when the requirement is too big to be settled through unsecured loans. These loans also help you in eliminating any danger that may arise if you fail to repay the loan amount.
Unsecured loans are not only taken out by tenants but these loans are also a favourite with many homeowners who are willing to compromise with high rate of interest but not with the security of their assets. Many homeowners consider unsecured loans as a safe option of borrowing. The dynamic market trends and the mindset of people have brought in a lot of lenders who are ready to offer variety of loan deals without involving any collateral. The deals offered are quite competitive for everyone to choose from. However, the borrower should look out for various options in the financial market and only then finalise a loan deal.
The processing time in case of unsecured loans is very less. Lenders usually take around 3 to 4 days before a loan application is either sanctioned or rejected. These loans do not involve any lengthy procedures like valuation of property and too many documents. It results in quick processing of the loan application.
As you might be aware, unsecured loans are based on your promise to repay as manifested in the loan agreement. Therefore, the lender has a little security in these cases. Perhaps, this justifies high interest rates and the imposition of strict rules. The loan amount generally extends up to £25,000, starting from as little as £500. The repayment period is limited and may extend up to ten years. The lender charges you from 8-40 per cent APR, depending upon your individual circumstances and financial standing. The lender also needs information of your current job, your monthly income and earlier repayment record. On the basis of these facts, the lender decides your loan application.
Your earlier repayment track assumes a big importance for the lender. It is only on the basis of your previous credit history that a lender can judge your morality. A bad credit record can spoil the game for you. Few lenders agree to give unsecured loans to bad credit holders and even if they agree, the loan conditions are very strict. So, always take care of your credit score.
As the competition is increasing, the lenders are also offering various loan plans that may fulfill your financial requirements. However, as a customer, you should shop around and find a good loan deal that suits your individual purpose. To stay competitive and have a big customer base, lenders have no option but to provide efficient services to the borrowers.
Source:-http://www.buzzle.com
Saturday, February 2, 2008
Low Risk Unsecured Loans
Being popular among tenants and students, unsecured loans are getting popular even among homeowners. As no collateral is needed against the loan amount, the loan gets processed without risking ones property. That makes even homeowners opt for this kind of loan for some quick monetary needs. However, that doesn't mean that everyone can get a fair deal on unsecured loans. There are some guidelines which a lender follows before sanctioning the loan to the concerned party. As the risk factor for the lender is higher, what he needs from a borrower is a good report card as far as his credit standings are concerned.
Popularity of unsecured loans is increasing substantially among Britons. As the lender is providing loan without any collateral, the processing time of the loan is reduced because the evaluation of property is eliminated. However, the interest rates are very high as compared to secured loans. That is one reason for the lender to smile.
People are no more scared of borrowing loans as the changing lifestyle demands more attention to material things. Credit card and other credit options seem too expensive as there are loads of hidden charges involved. Unsecured loans seem to be a fair deal to fulfil the required need for funds. As the market is crowded by different lenders, deals on unsecured loans are increasing too. What the borrower has to do is browse the market for different deals, compare them and come up with one which suits him the best.
Increasing lender options has augmented the chances of borrowers getting a competitive interest rate. However, the interest rate as compared to secured loans is much higher. Although unsecured loans are easily available, the lender often sees the buyer’s capacity to pay back the loan amount. The reasons which influence the loan process are borrower’s current job, status of earlier credit cards and loan payments, future prospects of job, number of dependents in the family, and bank records. After going through all these factors, the lender decides the loan amount and the time for repayment of the loan.
On the other hand, a borrower should know his financial status. Before opting for unsecured loans, one should figure out his monthly expenses, future plans and his capacity of returning the borrowed money. One should never go for extra money just because he is getting it. Always remember the amount borrowed has to be returned with interest to the lender. However, taking loans for unnecessary things isn't a great idea. If things are not planned from the borrower’s side of things, like repayment methods, the lender may eventually be taking legal action against the borrower.
Online research can also fetch you with a great deal, as there are number of lenders providing online loan deals. It just takes some of your time and effort to get the right kind of deal. Reports do show us that maximum number of people take unsecured loans to consolidate their debts. One can find a lot of loan options in the market; still, unsecured loans remain the favorite. As these loans can be used for any purpose, people generally use it to clear up their different bills (medical, college, paying rent etc.). The maximum amount one can avail is £25,000 which starts from as low as £500. The maximum time period for repaying the amount is 10 years.
As you might need instant cash anytime and the pay day also seems far away, unsecured loans can solve your issues. The best part is that these loans take very less time to clear, around 4 to 5 days. Some interesting facts show that lots of people are opting for unsecured loans for cosmetic surgery, and women are opting to clear their credit card payments through this loan type. As spending increases in the month of December, January seems the best month to clear up the remaining debts. We are becoming a slave to loans by opting for them to help us fulfil our so-called necessary requirements. However, people who are aware of pros and cons of loans, and consider all the aspects involved in the loan dealing, are happy at the end of the day.
Source:-http://www.buzzle.com
Popularity of unsecured loans is increasing substantially among Britons. As the lender is providing loan without any collateral, the processing time of the loan is reduced because the evaluation of property is eliminated. However, the interest rates are very high as compared to secured loans. That is one reason for the lender to smile.
People are no more scared of borrowing loans as the changing lifestyle demands more attention to material things. Credit card and other credit options seem too expensive as there are loads of hidden charges involved. Unsecured loans seem to be a fair deal to fulfil the required need for funds. As the market is crowded by different lenders, deals on unsecured loans are increasing too. What the borrower has to do is browse the market for different deals, compare them and come up with one which suits him the best.
Increasing lender options has augmented the chances of borrowers getting a competitive interest rate. However, the interest rate as compared to secured loans is much higher. Although unsecured loans are easily available, the lender often sees the buyer’s capacity to pay back the loan amount. The reasons which influence the loan process are borrower’s current job, status of earlier credit cards and loan payments, future prospects of job, number of dependents in the family, and bank records. After going through all these factors, the lender decides the loan amount and the time for repayment of the loan.
On the other hand, a borrower should know his financial status. Before opting for unsecured loans, one should figure out his monthly expenses, future plans and his capacity of returning the borrowed money. One should never go for extra money just because he is getting it. Always remember the amount borrowed has to be returned with interest to the lender. However, taking loans for unnecessary things isn't a great idea. If things are not planned from the borrower’s side of things, like repayment methods, the lender may eventually be taking legal action against the borrower.
Online research can also fetch you with a great deal, as there are number of lenders providing online loan deals. It just takes some of your time and effort to get the right kind of deal. Reports do show us that maximum number of people take unsecured loans to consolidate their debts. One can find a lot of loan options in the market; still, unsecured loans remain the favorite. As these loans can be used for any purpose, people generally use it to clear up their different bills (medical, college, paying rent etc.). The maximum amount one can avail is £25,000 which starts from as low as £500. The maximum time period for repaying the amount is 10 years.
As you might need instant cash anytime and the pay day also seems far away, unsecured loans can solve your issues. The best part is that these loans take very less time to clear, around 4 to 5 days. Some interesting facts show that lots of people are opting for unsecured loans for cosmetic surgery, and women are opting to clear their credit card payments through this loan type. As spending increases in the month of December, January seems the best month to clear up the remaining debts. We are becoming a slave to loans by opting for them to help us fulfil our so-called necessary requirements. However, people who are aware of pros and cons of loans, and consider all the aspects involved in the loan dealing, are happy at the end of the day.
Source:-http://www.buzzle.com
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