Facts About Personal Loans

Personal loans are typically general purpose loans that can be borrowed from a bank or financial institution. As the term indicates, the loan amount can be used at the borrower’s discretion for ‘personal’ use such as meeting an unexpected expenditure like hospital expenses, home improvement or repairs, consolidating debt etc. or even for expenses such as educational or going on a holiday. However besides the fact that these are quite difficult to obtain without meeting pre-requisite qualifications, there are some other important factors to know about personal loans.

1. They are unsecured – which means that the borrower is not required to put up an asset as collateral upfront to receive the loan. This is one of many reasons why a personal loan is difficult to obtain because the lender cannot automatically lay claim to property or any other asset in case of default by the borrower. However, a lender can take other action like filing a lawsuit or hiring a collection agency which in many cases uses intimidating tactics like constant harassment although these are strictly illegal.

2. Loan amounts are fixed – personal loans are fixed amounts based on the lender’s income, borrowing history and credit rating. Some banks however have pre-fixed amounts as personal loans.

3. Interest rates are fixed – the interest rates do not change for the duration of the loan. However, like the pre-fixed loan amounts, interest rates are based largely on credit rating. So, the better the rating the lower the interest rate. Some loans have variable interest rates, which can be a drawback factor as payments can likely fluctuate with changes in interest rates making it difficult to manage payouts.

4. Repayment periods are fixed – personal loan repayments are scheduled over fixed periods ranging from as little as 6 to 12 months for smaller amounts and as long as 5 to 10 years for larger amounts. While this may mean smaller monthly payouts, longer repayment periods automatically mean that interest payouts are more when compared to shorter loan repayment periods. In some cases, foreclosure of loans comes with a pre-payment penalty fee.

5. Affects credit scores – lenders report loan account details to credit bureaus that monitor credit ratings. In case of default on monthly payments, credit ratings can be affected reducing the chances of obtaining future loans or applying for credit cards etc.

6. Beware of lenders who approve loans even with a bad credit history – many such instances have proven to be scams where people with a bad credit history are persuaded to pay upfront commissions through wire transfer or cash deposit to secure the loan and who are left with nothing in return.

How To Get Personal Loan Easily

Financial credit! Most of us have some form of credit, but where does the idea come from? If the need arises for you, you need to consider where to get a personal loan from.

Credits have been around for thousands of years in various forms. The original type came from the lending of materials and grains between merchants and farmers, this over the centuries turned into the lending of money between two separate parties, and is now in the form we see it today.

Financial credit can come in many different ways. A lot of people have a mortgage, this is basically a form of credit from a lender to you which you pay back usually over a 20-25 year period. Store cards are another way of people lending money, they are a form of credit card that are specific to that shop.

The reason we chose to get help with our personal finances varies. Many people have several different store cards that they pay a monthly repayment to each month, but they consolidate all these repayments into one which is easier to manage. A new car is high on a lot of peoples list and also repairing the current car they have can be costly at times and they need help paying to get it back on the road.

A once in a lifetime family holiday is another reason people get credit, what better way to treat the family than to take them to a far away land for a holiday nobody will ever forget. The memories and laughs that are experienced on a holiday like this last a lifetime.

Where to get a personal loan? The most common place people would think of as to where to get a personal loan would be their local bank, they already give the person credit through mortgages and credit cards so they believe this is the obvious choice to go for help. In fact one of the best places where to get a personal loan is on the internet and specifically by using a matching service.

A matching service is a company that will take an applicants details and apply for credit on their behalf to a variety of chosen lenders. In most cases a bank can really only offer one option and that is their own financial option, on many occasions people are not always getting the best available option for them.

During the online process the applicant will start with filling in some simple details of where they live, and go on to how much they now earn and any existing debt that they might have. These are all important questions that need answering carefully and truthfully as the answer to all these will give the applicant the best chance of where to get a personal loan from.

The combination of all the answers to the questions will produce a credit score. This score is then used to go to the lenders and apply for their best options of finance personal to you. If the credit score is a low score then the lender could still lend money, however the percentage rate of the money lent will be at a higher rate and ultimately the monthly repayments will be more because of this.

So the next time you are thinking of where to get a personal loan. Grab a cup of your favorite coffee and sit in your favorite chair, put your computer on and start filling your details out online on a financial matching website. You might get a decision before you have even finished your drink and you could have the money in your account the next business day.

Risk Of Unsecured Personal Loan

Have you ever thought of a personal loan to get yourself out of a problem, sort your financial situation, or treat yourself to a memorable adventure holiday of a lifetime?

What are personal loans most commonly used for? They can be used for many things. Consolidation of debt is a reason a lot of people apply for personal credit. It can be a good idea to have a single fixed monthly fee and not a few spread across varying lenders. Buying a new car or repairing an older model or even a family holiday are all reasons people apply for credit.

Is lending a new concept? Not at all, the idea of lending has been seen for many hundreds of years. Silk merchants, wool merchants or farmers would have all been using this type of arrangement for buying and selling goods. Even before this the Greeks and Romans would have been lending monies to each other.

What is an unsecured loan? An agreement of this type is where money is given from a lender to a client at a fixed rate, this is also known as a debt. First of all there is a first applying process and an agreement between both parties formed. The money is given without any security from the applicant, which could be in the form of a car or house.

Types of unsecured personal lending can be credit cards and student debt. There is another form of unsecured credit and this is known as a revolving loan, this is when there is an agreement to an amount of money which has an upper credit limit. Over time this credit can be paid off and spent again to the most limit. Store cards are a good example.

What is the difference between unsecured and secured? The applicant would put a high value security item against the debt in the form of a car or house. If they then fall behind with any payments known as ‘defaulting’ the lender can have grounds to seek the payment through the security given by the applicant, an example is that they could make the client sell their car to recoup any missing payment or payments.

Unsecured has its benefits, that you do not have to put up security is a big incentive, the risk of losing your home or car if you miss a payment with a secured type agreement is big enough reason why people choose this type of personal agreement. It will not always come to this but the thought of it is enough for some people.

Why would I chose secured? Because the lender does not have any security against the money they are lending the big disadvantage is that the percentage rate of the finance being given is usually considerably higher than that of a secured loan. This is because the lender is taking a bigger risk if anything went wrong. For example; a late payment or a non-payment of any monthly agreed fee.

To make things safer the law states that a firm is not allowed to lend you any forms of credit until the first is totally paid off with them, this includes the interest charge on the whole amount. This is a safe guard that stops people applying for more than they can afford to pay back and ultimately creating too much debt that they cannot pay it off.

By far one of the best pieces of advice come from the experts themselves and that is to make sure you choose a reputable online lender for your unsecured personal loan. Just ask the question before going ahead with the agreement.

How To Get Loan With Bad Credit

Sometimes accidents happen and things break down and we all need help financially. If your current gas boiler stops working then a new gas boiler installed can cost a good couple of week’s salary and if the television is knocked over whilst the cat chases the dog around the TV room, then how do we find the money to get replacements?

Not all of us our lucky enough to have money in the bank, we live in a society where saving our hard earn money can be tricky, we all have mortgages, rents and utility bills to pay. If we do not have siblings or parents to go to when we find ourself in that tight spot what can we turn to? Loans are a good option and can give you the finance you need fairly instantly.

The first thing to do is go online and visit a loans company. During the process of applying for credit the company will run your details though a program to achieve a Credit score, any bumps they find in the road in terms of poor score rating could hamper your chances of getting the money you require.

Why have I got a poor rating? There are many reasons why you might fall under the group of poor. The main reason is probably a late card payment, or even missing the payment altogether. Closely followed by an existing debt that you may have on credit cards, store cards or other cards. These will all show up in the overall score to ascertain if you can have the money.

Companies are fully aware that although some of us have a poor rating there are those that are trying to start again and look to the future. When you apply you have to give your personal information, bearing in mind that this information is important for the company to run the checks and will only be held by the company.

With this information they will look at any problems you may have had and also compare your current circumstances. For instance in the past you might have been on a lower paid wage and since then you have had a promotion and now earn twice as much as before. This will all be taken into account when running the scores.

A company that offer matching services, even though a poor credit score came up through the check, could still be able to offer you a variety of loans. They will pass your applications on to many different lenders to make sure that a deal can be found.

Choosing to go through a company like this will only show up as one application, not as lots of different ones which is a good thing for you and your rating.

Personal loans are known as unsecured, there is no collateral held against them but because of this they offer a higher percentage rate of payback. Credit scores can affect the percentage of the agreement given. The better the score, the lower the percentage rate.

We all want a quick decision when we apply for loans, but how quickly can I receive the money? If all of the relevant paper is filled in correctly, then you can have the money as quickly as the following business day. Which is good, as some emergency cannot wait for a week whilst a decision is made.

So if you need financial help, do not be put off that you might think you may have a poor credit history, approach a company that match loans and see how they can help you.