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ØPersonal loan
ØThere are two kinds of personal
loans,
secured and unsecured. Secured loans are backed by some form of
collateral such as an automobile, a home or property. They are usually
for longer periods of time and for larger amounts than unsecured loans.
Secured loans are easier to qualify for because the lender takes on
less risk with the presence of collateral. Because of the lowered risk
they generally have lower interest rates. Secured loans are best for
borrowing large amounts, people with bad or imperfect credit history
and those that want longer repayment periods.
A
higher credit score will give you a lower interest rate. Obtain a copy
of your credit report from any of the major reporting agencies. Be sure
you get a copy with your FICO score. Correct any errors and make sure
all your bills are current, this will save you money. Lenders will use
your FICO to determine your eligibility and your interest rate.
Unsecured
loans do not require collateral; they are normally for less than
secured loans. The upper borrowing limit is usually about $25,000 with
a repayment term of 5-10 years. Some kinds of unsecured loans are cash
advances, payday loans and revolving lines of credit. Unsecured loans
can be used for debt consolidation, unexpected expenses, vacations,
home repairs, student loans, wedding loans etc. They are ideal for
people who do no own a home or property or homeowner who does not wish
to pledge their home or property.
Requiring
less paperwork than other loans, you can usually apply for an unsecured
loan online with as little as your credit score and history, debt
information and your earning history. One of the main benefits of an
unsecured loan is flexibility; they can be utilized for many different
kinds of purchases. The money can be available to you in as little as
24 hours.
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