Personal Loans: Use it the Way you Want

by : Angelo Drew

Personal loans are one if the most convenient way to obtain financial assistance when needed that most. It is the most easily available product in the market. Almost all banks, private mortgage dealers, financial brokers and high street lenders provide this loan.

To apply for personal loans, the borrower has to be above 18 years of age and a UK citizen. Lenders generally rely on the credit file, the borrower's electoral record, his disposable income, his annual salary and number of dependants.

In case of secured personal loans, the home equity available in the house is the milestone on the basis of which the loan amount is sanctioned. The maximum loan amount can be in the tune of around ?250,000. However, the total amount that can be sanctioned depends on the property evaluation of the asset. Do keep in mind that lenders consider any add-on value that you may have added to your home.

This includes kitchen renovation, loft conversion, landscaped garden and so on. Basically, anything that adds-on to the value of your property bodes well for you. The interest plans available for secured personal loans offer a lot of choice. Borrowers have the privilege of choosing fixed, variable or discounted interest rates.

However, in case of unsecured personal loans applicants will not be given any such options. Borrowers will be required to pay monthly instalments that too at a high interest rate because the loan is not guaranteed against any collateral. The lender stands a risk of losing his money, so to cushion his fall; he charges a high interest rate.

The repayment term for secured personal loans can be stretched to 25-30 years. But, in case of unsecured credit, the loan term can be extended only upto 10 years at the maximum. So, applicants should consider all the pro and cons of each loan before applying for a personal loans.