Loans can be broadly classified into a secured and an unsecured loan. Secured loans are easily available and provide you the flexibility in the repayment term. Though, it comes with lower rate of interest but here you will have the threat of repossession of your property.
Homeowners can seek a secured personal loan by providing their home as a security to the lender. A secured loan can be sought for various reasons like home improvement, purchasing a car, debt consolidation, funding your child's education, wedding etc.
However, one should be aware of the fact that a secured personal loan may lead to repossession of the property, if you don't keep up the repayments. Therefore, you should take that much loan which can be easily repaid to the lenders.
An unsecured loan can be sought without the assurance of any collateral. You do not need to pledge your property to the lender to avail an unsecured personal loan. This loan type can also be sought for various purposes like car-purchase, home improvement, holidaying, or marriage expenses.
An unsecured can be sought on the basis of your individual income and your repaying capabilities. Here, the threat of repossession of your property can be avoided as there is no presence of collateral.
In addition to this, the loans can be procured fast as the valuation of the property doesn't takes place. So, the turnaround time gets reduced because of the absence of this process. Less paper work is also involved with this loan type which reduces the hassles with this loan option.
Before seeking both these loan types, you should do a proper research work in the loan market. You should check out the rates with the different lenders of the UK and then avail the best loan deal as per your requirements and personal circumstances.
