April 10, 2007 Personalloansare the only loans that touch most lives, as theyprovide credit assistance for a wide range of the personal needs ?for varied business requirements; to recover from a bad creditsituation; for education and career development objectives; torenovate the home; for medical and beauty treatments; to consolidatemultiple debts; for new or used car purchase; to cover vacation andholiday season expenses; and for endless wedding expenses.
Industryreport reveals that preference for securedloans is on a rise in the UK financial market ? even forsmall monetary requirements ? as they are much cheaper than othercredit options like unsecured loansand payment cards (credit cards, store cards, charge cards andoverdrafts). Borrowers are gradually realising that unsecured debtsprove to be more costly because they have high interest rates, andthat secured debts are the most cost-effective way to thrashfinancial problems.
Securedpersonal loans, as the name suggests, can only beavailed by those loan seekers who are willing to pledge an asset(like home) as collateral against the loan amount. Collateralprotects the lender's investment, and thus makes it easy for him topart with his money and facilitate the loan seeker with favourableloan terms and conditions like:
1-Quick attention ? assecured deals are safe for the lenders
2-Highcredit limit ? typical range is ?5,000 and ?250,000
3-Competitivelow APR ? typical range is 6.7% to 19.9%
4-Varietyof rate plans ? fixed, variable, discounted, capped and flexible
5-Differentrepayment methods ? capital, interest only, and partly interestand partly capital
6-Negotiableloan terms and conditions ? deferred payment up to 6 months,repayment holiday and accelerated repayment
Pleasenote: Irrespective of the reasons, repeated defaults ornon-payment can lead to repossession of the pledged collateral torecover the loaned amount. But, the borrower can easily take care ofthe risks by paying his EMI's (Equal Monthly Instalments =Principle + Interest) as decided, and by choosing a suitablerepayment plan on the basis of his payback capacity and future plans.
Idealfor big monetary requirements, secured type of are the best option for adverse creditholders and probably the only alternative for people who have beendenied unsecured credit.
