Loans for Different Situations

By: Eric

You can take out loans for virtually anything as far as it is legal. Even if you do not have any security to offer, you can still get a loan.

There are different types of loans available in the UK financial market. Some require you to give security while others do away with such requirements. So, you can choose a type of loan as per your individual circumstances. If you are a homeowner willing to give security to the lender then secured loan is a good option. Tenants can opt for unsecured loans.

Unsecured loans find their common uses in debt consolidation, home improvement, paying shopping, vacations, and cosmetic surgery bills. There is no point in risking your home (by collateralising it) for borrowing a small amount of money. But, if you want a big loan amount, say ?100,000, then it is worthwhile to give your home as a security to the lender because it will lower down the APR.

Unsecured loans are safe loans as far borrowers are concerned. In case of any default, lenders can bring a legal suit against you for the recovery of money but they cannot repossess your assets. For this reason, many homeowners also prefer unsecured loans.

Unsecured loans involve higher rate of interest than secured loans. Still, many people prefer unsecured loans for the reason that such loans cannot invite repossession in any case. In fact, a recent study by a leading financial company shows that an average Brit between 30 and 35 has unsecured debt to tune of ?5,863. This is the age when expenses start to rise; some are set to climb the property ladder or are looking forward to do the same. With no property to secure at this stage of life, unsecured loans provide them a good chance to boost their available funds.

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