Loan Guide: Taking A Look At The Different Types Of Loans

Due to the large number of loans available in the market, many people are confused what different loans mean. To help you out here are some of the common types of loans and what they mean:

Home Improvement Loans

These are loans that you take in order to raise the value of your home to sell it at a higher price. It’s usually an unsecured personal loan; therefore, you don’t have to secure it against an asset such as your house. In most cases, it’s short-term (you repay it within 12 months-5 years).

While the loan is great as it helps you to improve your property within a short period of time, it tends to attract high interest rates; therefore, you should do your calculations and ensure that you can afford before you take it.

Bridging Loans

These ones help you in completing purchase of property before you sell the existing home. They are designed for landlords and amateur property developers; however, wealthy and asset-rich borrowers can also borrow them. Although, the loan is great as it “bridges” the gap, it tends to attract very high interest rates. It also attracts many overhead costs.

To get the loan you should get it from an FCA (financial conduct authority) regulated broker. The broker will not only advise you on the best bridge that is ideal for you, he will also advise you on other options that are available for you.

Car Loan

This is a self explanatory loan as it’s very common with many people. It is the loan that you take out to pay for a car. There are many financial organizations offering the loan and all you need to do is to research and find the best organization to work with. The repayment period varies from 3-5 years; however, shorter and longer terms are available.

You should note that the amount that you get depends on your credit rating; therefore, for you to have an approximate value of the amount that you will get you should check your credit rating with a credit reference agency.

Conclusion

This is a guide on the different types of loans in the market. Before you take any loan always ensure that you can afford it. As mentioned before, there are many lending institutions that have different interest rates and repayment periods. You should always do your research and find the best institution for your situation.

Low Rate Interest Personal Loans – How to Get Them Easily

The first important point that would qualify you as a borrower to low rate interest personal loans is that you should enjoy good credibility, have a good source of income to repay loans and also have good financial stability. Financial institutions and lenders are very eager to give low interest loans to those borrowers because of the low risk attached in lending.

Do you need a low rate interest personal loan now? Do not go fix up the agreement with the first lender you meet and negotiate with; shop around by investigating about various lenders who lend money. This could be financial institutions, moneylenders and also your own friends and relatives. Your friend or relatives may ready to give you loan without security. However consider all aspects including long term relations, fees and low interest loans.

Conduct a wide market survey of the different banks and lenders and get a comprehensive data of all of them. Lending institutions with whom you have had good credit dealings in the past may be ready to give you low rate interest personal loans. Besides your financial stability and profitable reason for the loan could also influence them.

Then contact the bank that offer low rate interest personal loans and meet the bank’s financial assistant to determine the real value of the personal loan. These loan officers are able to guide the customers through the process and assist them in assessing the real interest value of the loan. Micro-finance companies and N.R.I banks besides government organizations do offer low interest loans with just a proof of address and credit history.

The creation of web portals by banks has made it very easy to shop for personal loans at low interest rates. However a personal visit to the bank thereafter can give you a real idea of how far such low rate interest personal loans are for you. Certain banks require a lot of documentation, verifications and other hidden costs.

Some who do not have a strong financial stability or credit standing may consider borrowing from their friends and relatives or may prefer their near and dear to act as a guarantor for their loan. So you may have access to low rate personal loans and flexible repayment terms, however written agreements eliminates communication flaws and are legally binding on both parties.

You could find a good bet in low rate interest personal loans given by certain loans and financial companies. However most of these companies believe in lending money at high interest rates to high risk companies only, but they have recently started giving loans at low rate with a variety of incentives and rewards instead of penalties to encourage easy and speedy repayments.

Cash credits and unsecured personal loans are available for the not-so-financially-strong borrowers. These may be good in the short run when you repay back soon, but these prove to be costly in the long run due to increased rates as time elapses. However it is best to find out and compare their plans and schemes regarding interest loans.

To conclude if you have decided that you want to take a loan, first visit the bank or any other lender or inquire online to get full details of such personal loans at low rates. However it is suggested that one always remains within ones means and avoids taking loans, but contingencies that play an important role in most people’s life makes them go for loans and look out for interest personal loans.

Instant Unsecured Personal Loans: A Guide to Getting $5,000 With Bad Credit

Much as we like to think a small loan at least is always within reach, traditional lenders tend not to think in the same way. They have far more conservative attitudes, ultimately spoiling our plans of securing extra finances when we most need them. But there is a way to secure instant unsecured personal loans despite having poor credit scores.

The very fact that instant approval with bad credit is attainable can seem strange, especially since lenders are clearly taking on a huge risk by granting them. What should be remembered, however, is that not all lenders take such a stark view of poor financial positions.

What is also important to realize is that small unsecured personal loans, from $3,000 to $5,000, are not impossible to get. It is just a matter of constricting a strong enough application and approaching the right lender.

Constructing The Right Application

So, what is required to construct a loan application that is strong enough to make approval likely? After all, instant unsecured personal loans are not available on request. Lenders everywhere have criteria, and meeting them is the first step.

The basic loan criteria are well known. Applicants must be over 18, must be either a US citizen or a legal long-term resident, and must be in full-time gainful employment. After that, getting instant approval with bad credit comes down to proving that the loan is affordable.

This means that the debt-to-income ratio is healthy. The ratio measures the amount of existing debt compared to the income earned every month. Lenders have a limit of 40:60, meaning no more than 40% of income can be committed to repaying loans, including the new unsecured personal loan. Improving the ratio is done by clearing some or all existing debts, usually through a consolidation loan.

The Issue of Security

So, why is security such an issue anyway? Collateral provides security that can convince a lender to grant an instant unsecured personal loan. So, why do some applicants not provide the collateral necessary to guarantee approval?

There are two reasons for this. Firstly, an applicant may not have anything to offer as collateral that matches the
value of the loan. This is certainly true for large loans, of perhaps $50,000 or more, but should not be a problem for small loan of $5,000.

But even when seeking instant approval with bad credit, applicants may not want to put any possessions of value up as collateral. This is because they could be lost should there be any difficulty in making repayments in the future. Therefore, they prefer to seek an unsecured personal loan, not a secured one.

Loan Type Options

So, what are the loan types on offer? And which one is the best to choose? Well, there are several options to consider when seeking small or medium-sized instant unsecured personal loans. The most common is a payday loan, but online lenders offer other choices.

A payday loan is the most likely for instant approval with bad credit since approval is based on an upcoming paycheck. However, the interest is extremely high (35%), and repayment period very short (30 days), and loan limit quite low ($1,500).

Online lenders offer no credit check loans of between $3,000 and $10,000, with competitive interest and longer-term loans (up to 7 years). A greater amount of interest may be paid over that time, but it also means the monthly repayments on the unsecured personal loan are lower and much more affordable.