Personal loans – A synopsis of secured credit
Personal loans have two sub-types – secured personal loans (availed by pledging collateral) and unsecured personal loans (availed without pledging collateral). Though both sub-types have pros and cons, secured debts are the most cost-effective way to thrash financial problems. Market report shows that secured loans are more popular in the UK credit market – even for small monetary requirements – as they are much cheaper than other credit options like unsecured loans and payment cards. It is obvious that a lender would pay more attention to a deal that guarantees payback, i.e., a secured loan deal. Because collateral protects the lender’s investment, he facilitates the borrower with loan benefits like high credit limit, competitive low APR, multiple rate plans, different payback methods and flexible loan terms and conditions. Please note: The APR may vary greatly according to the type and amount of loan required, desired payback option and period, past and current credit record and value of the pledged collateral. Though secured personal loans offer lucrative monetary solutions, they have certain limitations too. They can only be availed by homeowners and property owners; the overall loan application process is slow, due to time-consuming property evaluation procedures. In the event of repeated defaults or non-repayment, the lender can take over the pledged collateral to recover his money. Please note: To avoid risks, the borrower must pay his EMI’s (Equal Monthly Instalments = Principle Interest) as decided, and choose a suitable repayment plan on the basis of his payback capacity and future plans. Personal loans are most generic or basic form of all loan categories, as they offer numerous alternatives that can take care of virtually every possible financial requirement. Though ability and willingness to pledge collateral is the basic criteria for opting for a secured type of personal loan deal, the loan seeker must give importance to the practicality or feasibility of getting into property related legalities and risking his property for a small amount. To sum it up, Personal loans are a safe bet for all parties involved. They are most suitable for big monetary requirements, and are the best option for adverse credit holders and the only alternative for people who have been denied unsecured credit.
About the Author
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done her masters in Business Administration and is currently assisting Chance4finance as a finance specialist. To find a personal loans ,that best suits your needs, visit chance4finance UK. Visit their website at: chance4finance
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