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By: Jake Nathan

We can categorise our personal needs as follows:

  • Urgent - charges related to surgery, extended treatments, late education fees, debt consolidation and more


  • Routine - expenses related to home, business, health, education, wedding, vacation, holiday season, vehicle, debts, bad credit and more


  • Luxuries - payments related to spa treatment, spiritual healing, flying lessons, cosmetic surgery, gambling and more


Personal loans, as the name suggests, provide optimum monetary solutions for most of the above-mentioned needs.

Some of the most popular products available in the credit market are: bad credit loans, business loans, car loans, cosmetic surgery loans, debt consolidation loans, education loans, career development loans, holiday loans, home loans, homeowner loans, home improvement loans, tenant loans and wedding loans.

Except home loans and tenant loans, most of the above-mentioned loans can be availed in both secured and unsecured form. Secured loans can only be availed by homeowners or property owners and are recommended for big monetary requirements.

Unsecured loans, primarily designed for tenants, can also be availed by homeowners or property owners, as they may not be willing to get into property related legalities or risk property for a small amount. Also, they are recommended for small monetary requirements (offering collateral may not be necessary) and urgent monetary requirements (getting into lengthy property evaluation procedures may not be feasible).

Secured personal loans, availed by pledging collateral against the loan amount, offer maximum credit benefits like quick attention, high credit limit, competitive low APR, flexible payback terms and negotiable clauses.

However, secured loan seekers have to face the risk of collateral seizure in case of repeated defaults or non-payment, and have to cope with the slow loan approval process because the entire asset evaluation procedure is time-consuming.

Unsecured personal loans, availed without pledging collateral, offer benefits like no collateral (no deposit against the loan amount), less paperwork (no red tape), quick service (fast loan processing), and no immediate risks in the event of repeated defaults or non-repayment.

In this sub-category, the stakes are normally high for the creditor. Hence, unsecured loan seekers too have to face certain limitations - limited amount, high APR, fixed payback terms and non-negotiable loan clauses.

The above stated comparison proves that both sub-categories have pros and cons. Hence, loan seekers must and opt for the most suitable one. Basis of comparison should be:

  • Monetary requirement and urgency


  • Capability or willingness to pledge collateral


  • APR and other loan benefits


Personal Loans
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