Advice

Secured Vs. Unsecured Loans: Which one is right for you?

There are some fairly big differences between secured and unsecured loans, and it’s important that you know what they are. If you want to choose the right type of loan to match your borrowing needs, you will definitely want to get this information before making a final decision. A lot of people tend to rush into selecting one loan over another, and many of them end up regret doing so.

What are Secured and Unsecured Loans?

It is first important that you have a basic understanding of secured loans and unsecured loans. A secured loan is a loan that you take out but have to put some sort of collateral down for, such as your vehicle or even your home. An unsecured loan is a loan that you can take out without needing to put down any collateral at all.

Some examples of a secured loan include mortgages, home equity line of credit, auto loans, boat loans and recreational vehicle loans. Some examples of unsecured loans include credit cards, persona (signature) loans, personal lines of credit, student loans and some home improvement loans.

Interest Rates

When it comes to personal loans, the better your credit score is, the less you will spend in interest. People who take out both types of loans can pay a high or low interest rate, depending on what their credit is like. It is important to keep in mind that the amount of money that you spend in interest will at least partially depend on where you live.

If you want to get the best possible deal on your loan when it comes to interest rates, you will definitely want to make a point of looking for the right lender. Not all lenders charge the same amount for interest on the loans they give out, so you will need to keep that in mind as well.

Credit Requirements

Secured loans tend to have more lax credit requirements, simply because they require collateral, such as a house or car, to be put down in the event that the borrower cannot pay back the loan for whatever reason. Getting an unsecured personal loan requires better credit, but you don’t necessarily have to have perfect credit to get one.

It is highly recommended that you take a close look at your credit report before you start applying for any type of loan. Sometimes people find that there are mistakes on their credit reports that are actually negatively affecting their scores. If you are planning on applying for any sort of loan, you should really make a point of doing this right away.

Availability

You will find that most unsecured personal loans are available online as well as through traditional financial institutions like banks and credit unions. While it’s true that secure loans are sometimes available online, they are not as common. If you want to get a secured loan, you will most likely have to go down to a bank or lender’s office in person.

One of the great things about the technology age that we live in is the fact that you can apply for loans online fairly quickly and easily. You should be prepared to submit quite a bit of information, such as bank statements for proof of income, your phone number, address, email address and much more. Much of this information will be used to determine whether or not to approve your loan.

Conclusion

There are benefits and drawbacks of both personal and unsecured loans, and not everyone can benefit from either one. It is crucial that you take enough time to do your research so you can make an educated decision. There are a lot of different things to consider when you are going about making this sort of decision, and it’s certainly not a choice that you will want to make lightly. Both of these types of loans can be extremely helpful when you want to buy a new house or car as well as other things. These days it’s more important than ever to know exactly what you are getting yourself into when it comes to a personal loan, whether it is secured or unsecured.

Payday Loans

Important Facts about Payday Loans

There are a lot of important facts about payday loans that you should be aware of if you are thinking about getting one. These days more and more people are applying for payday loans, and there are many benefits associated with them. If you need a significant amount of money in a hurry, this is certainly an option that you will want to look into.

You get your money fast

One of the most important things about payday loans that you will need to take into consideration is that they can help you get the money you need quick. Most people get money from a payday loan within 24-48 hours after applying, if they are approved. This means that you shouldn’t have any problems whatsoever when it comes to getting the money you need when you need it. The biggest reasons that so many people are applying for these loans is because the funds are dispersed so quickly.

Even people with bad credit can get them

Another reason why payday loans have become so popular is because even people with less than great credit are able to get them. If you have a low credit score but still need money for some emergency expense that has recently come up, it is highly recommended that you look into getting a payday loan.

While it’s true that payday loan lenders typically run a credit check on those who apply for payday loans, this doesn’t necessarily mean that you won’t be able to get one. Even those with a low credit score still have a chance of getting the money they need with one of these loans.

You have to go through a private lender

The fact is that most banks and credit unions do not give out payday loans, which means that you will have to go through a private lender. It is important that you take that time to find the right private lender to borrow from, because not all of them are trustworthy. The more time and effort you put into researching your lender options, the better your chances will be of getting a great deal on the loan you need. The last thing you want is to choose just any lender, because you will most likely end up regretting it.

They have a short payback period

You will also need to keep in mind that payday loans are short term loans, so you’ll have about 2 weeks to pay back the money you borrow. These loans are different from most other kinds in the sense that you won’t have as much time to pay back the loan, but it’s typically a smaller amount. If you don’t think that you will be able to full amount of the loan on time, you will want to avoid taking it out in the first place. Most people who get these loans are able to pay them back on time, and the lender will make sure that you are financially able to do so before approving you.

They can be a great option for those who have an important expense

If you have some sort of emergency expense that has recently come up, such as a car repair or medical bill, you will definitely want to consider taking out a payday loan to pay for it. Most of the people who apply for these loans are trying to pay off some sort of important and unexpected expense that has arisen in their lives. Sometimes it can be difficult to cover these kinds of expenses when you are financially unprepared, but a payday loan can help you out in a big way.

Conclusion

Payday loans have been rapidly increasing in popularity over the last decade or so, and for good reason. You will definitely want to know all of the facts when it comes to loans before you decide whether or not to even apply. There is a good chance that you can get approved for a payday loan, but you will first have to do your research. The more time you spend doing this research, the better off you will be in the end. Getting a payday loan is not something that you will want to take lightly.

Guarantor Loans

Everything you need to know about Guarantor Loans

Guarantor loans have gained quite a bit of popularity with the public over the years, and they are essentially unsecured loans that require borrowers to have another person with good credit to act as the guarantor. These loans are typically for those who do not have very good credit but know someone with good credit who is willing to assume responsibility for paying off the loan if they are not able to for whatever reason.

Who are Guarantor Loans for?

Guarantor loans are best suited for those with low credit scores. If you have poor credit and have found getting a traditional unsecured loan to be difficult because of poor credit, a guarantor loan could be a good alternative. It is important to keep in mind that these loans typically come with a higher interest rate than secured loans, as they do not require any collateral on the part of the borrower.

One of the best things about guarantor loans is that they offer people the ability to demonstrate to credit agencies that they have a track record of borrowing and paying back money in their own name. If you are in the process of trying to rebuild your credit, it is highly recommended that you take the time to look into this particular loan product.

Is approval for Guarantor Loans a sure thing?

No, there is never any guarantee that you will be approved for one of these loans. Many people’s guarantor loan applications are rejected for a number of reasons, but it’s typically because they are seen as too much of a liability by the lender.

In order to qualify for a guarantor loan, you must be over the age of 18, have an active UK bank account, and willing/suitable guarantor. It is the potential guarantor that will have their credit history scrutinized, but the primary borrower still needs to demonstrate their ability to pay back the loan in a timely manner.

Who can act as a Guarantor?

Anyone can act as a guarantor, provided they have a good credit score and adequate income to be able to pay back the loan if the primary borrower cannot for whatever reason. The relationship between the actual borrower and the guarantor doesn’t really matter at all. The guarantor must also be between the ages of 18 and 74 and be a homeowner, even though the loan is not typically secured directly against the property. The lender will most likely ask the guarantor for proof of ID as well as employment and bank statements.

Applying for a Guarantor Loan

You will typically be able to apply for a guarantor loan online as opposed to going down to a bank, credit union or private lender’s office. It is highly recommended that you take the time to check guarantor loan comparison tables if you are interested in applying for one of these loans. Once the lender has made their decision (this process can take up to a few days), the funds will be transferred directly into your bank account.

There are broker services that you can take advantage of when trying to find the very best deal on this type of loan, and you might want to consider paying for them. These services can really help you get the loan you need with minimal fees, so you don’t end up paying more than you have to.
Things to consider

You will need to consider a number of things prior to applying for a guarantor loan, such as whether or not you will be able to pay back the full amount that you borrow on time. If you fail to pay back the loan, the person that is named as the guarantor must do it. Failing to pay back your loan will reflect poorly on your credit score, so you will need to keep that in mind as well.

Make sure that you take the time to read over the fine print of the contract that you sign with your lender so you don’t miss anything. You do not want to make the mistake of not being thorough when reading the contract that is put in front of you.