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AskLiz aims to provide short, informative articles on a range of everyday topics. Use the links below to explore each topic or use the handy search box to search the Internet. Personal Loan - Money, Finance, Mortgages & Loans Guides and TopicsAbout Personal Loans Many people make the mistake of believing an "unsecured loan" is risk free and their home or possessions are not at risk should they default on payments. Nothing is further from the truth. Your home and possessions can be at risk from ANY loan you take out and fail to pay. Further more, your credit rating will be seriously impaired making future loans very, very expensive... think hard before defaulting on any loan. In most cases loan companies will be happy to defer or accept lower payments for hardship cases. However, it's much better to never borrow more than you afford to pay... easy to say, hard to do! The main advantage of an unsecured loan is that you usually get the MONEY VERY QUICKLY. Lenders apply a very strict loan criteria for unsecured loans. If you have any adverse credit or arrears problems, it's highly unlikely you will be able to get an unsecured loan at a reasonable interest rate. In most cases your ONLY option is to try for a home owner non status secured loan. Secured loans are no more "risky" than an unsecured loan... and generally have a much lower interest rate. Providing you have the ability and intend to repay the secured loan. For peace of mind you should seriously consider taking out payment protection insurance FOR any LOAN. About the author: Jack Wheeliebin is a top introducer for a number of UK loan providers and manages two of the most popular loan and mortgage site on the Internet. www.go4aloan.com & www.go4amortgage.com Let's consider a Personal Loan Back in the days where banks were the only lenders in the business, getting a loan meant putting on your best clothes to go to a nervy appointment with the bank manager. You'd sit there for some minutes, feeling like you're facing the school headmaster and bracing yourself for humiliation. It is then such a relief that these days, things aren't so bad. Banks used to have the market for personal loans all to themselves. This is because they were the only business entities that could offer personal loans. And because of this, they charge you extortionate rates, confident in the knowledge that the borrower has no other choice. Well, it's a little different now. The market is open, which means that banks are no longer the only ones from whom you can get your personal loan. There are many places where you can apply for personal loans. And because of the increase in supply of consumer credit, the rates have become increasingly competitive. You can find loan providers everywhere. Supermarkets, gas suppliers, junk mail, television, and magazines are only a few of the places where you can look for personal loans. This means that a wide array of options is held open for you, assuring you only the best of deals. However, with so many places to choose from, where do you start? Personal Loans - The Beginning Let's start at the beginning. What is a personal loan? A personal loan is money lent to an individual by a financial institution for a specific personal purpose. The circumstance does not include buying a house since that is covered in wholly different loan category. One main difference between a personal loan and a home loan is that most personal loans are unsecured. So, that means that there is no collateral provided and the only guarantee that a borrower can give the lender is his reputation for good credit. This is also one of the main reasons why personal loans have interest rates that are a percentage higher than most other loans. The Factors to Consider To work out the answer for this, you will need to find out how much you can afford on monthly repayments. Do your calculation by looking at your monthly household income. Afterwards, find out what your monthly expenses are. These include your maintenance payments, food, outstanding debts, any bills, clothes, and any other miscellaneous spending money. Add all these figures and work out a safety margin of 10% just to be on the safe side. You will then take all your expenses and subtract them from your monthly income. What you have left is your available cash for your personal loan. When you're taking out a loan, it doesn't really matter what your reason is. The main question is whether or not you can afford to make the monthly repayments. About the author: Tony Forster has a keen interest in living debt free having been "up to his ears" before I realized the need to take control. I am compiling a useful online resource at http://www.loan4payday.info enabling anyone to find the perfect money management for them. LOANS SECURED ON YOUR
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