Personal Loans, also known as
unsecured loans, do not require the borrower to pledge any assets as collateral. Due to this, there is more risk involved for the lender and as such it is often
more difficult to obtain a personal loan. A lender will look at your borrowing history, personal details, credit history, outstanding debts and annual income to determine whether you qualify for such a loan. It is important that the lender can see evidence of a good credit history and sufficient earnings to keep up regular repayments on the loan.
Personal loans usually come with highest
interest rates due to the bigger risk for the lender, but are usually much
quicker to arrange and funds can often be made available 24 or 48 hours after the application has been accepted. A personal loan will typically have a
fixed term and a
fixed rate and is usually repaid monthly. Some lenders allow penalty
free early repayment, and some allow payment holidays whereby the borrower is excused repayment for a particular time period, typically a few months. As the size of loan is much smaller than a homeowner loan, the
repayment term is generally shorter, typically 5 – 10 years.
A personal loan could be an option for
debt consolidation, although it may be the case that other offers such as releasing your home equity would be a better option for those with
bad credit or
finance history as these offers may have cheap repayments.
Despite not securing property on a personal loan, it is still vital that monthly repayments are met. It is possible that court action taken to recover outstanding balances will take your assets into account.
To get a personal loan here at 123-Approved is both fast and efficient. Just by filling in one short form, we’ll compare over 90% of the market lenders to find the best deal for your individual lines. It takes just 2 minutes to get 123-Approved!
