Hundred Needs, One Loan

By: Gracy Bonsu

Loans are the weapons to fight against financial odds and difficulties. Earlier, only people on the verge of financial constraints used to take loans. The UK financial market is now flooding with numerous lenders and scores of loan plans. Loans have now become a routine thing for many. The transformation in the financial market is due to the fact that loans are no more concerned as burdens and people are showing more interest to borrow from financial institutions compared to friends and relatives. Loan market has now become more professional and competitive. In earlier times, bad credit borrowers, unemployed and students were out of the preview of loan availability. However, the situation has taken a favourable leap and the loan options are now open to all types of borrowers.

Different loan plans meet different purposes. When you are applying for a loan for home renovation, the loan amount is renovation specific. You cannot use that money for other purposes like purchasing a car. Similarly, when you are applying for debt consolidation, you can only do consolidation by the loan amount. Hence, all the loans are purpose specific. Is not it a great idea to have a loan that suits all the purposes?

Personal loans are those loans where the lenders have no say in the pattern of loan amount expenditure. If your purpose is legally correct, you can have a loan. The maximum amount you can borrow depends upon the nature of the loan plan as these loans can be both secured and unsecured. When the loan plan is secured, the loan grant requires a residential property security and the loan amount varies according to the equity in the pledged security. As the average value of a residential property in the UK is near about 200,000 pounds, the borrower can borrow a handsome amount against the security.

When the loan plan is unsecured, it is called a fast loan. These loans are free from residential property security clause and the loan processing is quick due to the absence of property valuation and lengthy paperwork. Here, the loan amount depends a lot on the credit rating. People having a fair credit history can borrow as much as 25,000 pounds. Homeowners also prefer these loans as there is no fear of repossession.

As both the loan plans have their own merits and demerits, you should compare loans before making an application. You are advised to apply for the loan plan which suits your requirements and repayment capacity.

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