Tips To Help You Get A Personal Loan
The personal loan is often borrowed to meet the unforeseen expenses
. But if you have the habit of using personal loans to meet needless expenses you are at risk.
If the expense can wait till you get the required amount on your own, then what is the need of personal loan? Here are some very simple personal loans tips that would help you make an informed decision about the type of loan to get and who and where you could get it from.
The First Question you should be really asking yourself is: Do I really need it?
Then can I manage without a personal loan? And is it for a frivolous expense- like a holiday- that I could really avoid?
And the last question to ask yourself is, is it possible that I could secure the money by other means- like borrowing from a relative, taking up a part time job, sale of an asset? If you can avoid it, then don't take out such a loan.
A loan is a very serious thing and should be taken as such. Any kind of loan taken without regard as to how and when it can be paid back can easily turn into an ugly monster.
It is not advised that loans be taken if you do not have the funds in your budget to adequately pay it back. If the payment is not within your means, you may have to find another way to get the money you need.
A personal loan would vary according to certain factors like the amount that you need to borrow, the interest rate, whether or not it is a fixed or variable rate, repayment term, the down payment or deposit you put on the loan, any associated fees and any insurance that the lender requires.
In other words, you are buying a sum of money for more than it would cost the lender. It would be a mistake to consider only the rate of interest before taking a personal loan.
There are also arrangements fees and penalties of prepayment that you would have to consider. Many of the "no-fee" credit lines carry with them a prepayment penalty.
This is the way the lender/broker makes his profit. Please work out the total expenses of your small or big personal loan before signing up for the loan agreement.
Secured personal loans are loans are given by the lender upon the pledge of collateral by the borrower to secure the loan- like property, or a car. Subsequently as the lender stands to recover his money if there is any default in repayment, the rate of interest charged on the loan is less.
Unsecured personal loans are loans that are given to the borrower with no pledge of collateral or security. As the lender faces a very high risk of losing his money should the borrower default on repayment, the interest rate is quite high.
Another options would be an unsecured bad credit personal loan. Here again the borrower with a history of bad credit rating is being given a loan without forwarding any collateral on his part.
All the lender has is the borrower's signed promise to repay the loan. Therefore such personal loans are also called signature loans.
Signature loans would be issued in full entirety upon the receipt of a signed activation letter or a letter of commitment from the prospective borrower. Consequently to protect the lender's money, the rate of interest charged would be high.
A guaranteed personal loan comes with a requirement from the lender that the borrower must be having a certain level of income and a good credit rating. He should provide the lender with sufficient proof of his ability to make the repayment.
There are many money lenders out there, it is up to you to determine what lender you go with. Researching what type of loan is best for you is the first thing you must do.
Then find a lender that offers the type of loan you have decided upon. Compare rates and investigate the lender you are thinking of to make sure they are legitimate.
by: Jack Landry
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