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Personal Loans Your Personal Finance Manager
Life is full of uncertainties. You never know what lurks in the next corner you take. And, therefore, we need to equip ourselves better with things that prove to be quite useful. Money is one such requirement and the solution to most of our problems. But it is not possible for us to carry ready cash and put it forth in a snap of fingers.
This is where personal loans come handy. Studies show that people in the UK prefer to take personal loans for every big or small requirement. People here apply for loans for various purposes, whether it is for emergency situations of grave importance like medical requirements, unemployment loans, or it is for something like home improvement or cosmetic surgery.
Personal loans are of two kinds: Secured and Unsecured. Secured loans, as is suggested in the name, require some sort of security from the borrower. Usually, lenders in the UK accept property such as land or house as security. This security is collateral against which the lender would lend the money. And it is this security which provides the lender a sense of security, an assurance that the borrower would pay back the loaned amount, else the collateral would be seized by the lender.
In case of unsecured loans, there is no requirement of any security as such. The lender does provide the money to the borrowers based on his financial history and his past dealings. However, the rate of interest is higher, and the terms and conditions more rigid in case of unsecured personal loans in comparison to secured loans. This difference arises due to the absence of security, which leads to lack of sense of assurance for the lender.
When you apply for personal loans, you can go for either secured loans or unsecured loans; however, you have to make sure that for secured loans, you need to have a property whose equity is worth the amount you wish to borrow. And in case of unsecured loans, you have to meet the requirements set by your lender.
Debt Consolidation Loans for quick loan repayment and savings on overall loan costs
You may have landed yourself into a bundle of loans, each taken up for special purpose. Now you are at loss and totally confused on how to handle so many loan payments considering your money inflow. Wondering how to come out of this situation? Well, you could always go for a debt consolidation loan and follow it with serious intent.
As the name suggest debt consolidation is undertaken when you wish to merge all the existing small loans into a single loan. Afterwards, you can receive a lump sum amount of loan amount equivalent to the debt amount. Begin with repayment of all the debts and at the end you will be left with a single loan and its repayment i.e. the debt loan and its repayment installations.
The main advantage of debt consolidation loan is that you save quite amount by paying off the loans in lump sum leaving you with enough cash to splurge a little. These loans are ideally availed to pay off credit card bills, online shopping bills, utility bills and even other small loans which you could have taken on off and on basis.
Just before taking up a debt consolidation loan, you could actually prepare a sheet of your loans and their break up structure which includes
1.Loan amount 2.Rate of Interest 3.Repayment Instalment
Keeping this sheet ready, you could approach for a debt consolidation loan which will provide you with a loan amount equivalent to your debt and also the rate of interest so applicable. If you actually compare both the sheets, you will conclude that a debt consolidation loan works out cheaper and advantageous for you.
A Debt consolidation loan with a fixed rate is not advisable. Also you should check out the terms and conditions in case of pre payment of loan. In most cases debt consolidation loans do not charge fixed rates of interest and no charges in case of pre payment of the loan.
A Debt consolidation loan may prove to a god send blessing but it remains so provided you actually use it repay off the existing loans. In case you fail to do so and use up the loan amount for some other purpose, all possibilities of a huge financial burden are likely to take place with you.
There are many money lenders who offer debt consolidation loans online. You could ask for quotes online, check out their rates of interest, additional charges, the prepayment terms and conditions which you are liable to pay in case you go ahead with the debt consolidation loan.
On the overall, if you get a good debt consolidation loan which offers to charge you with a lower rate of interest and minimal or no additional costs especially in the case of prepayment of the loan, you do need to be smart and swift enough to go ahead with the same and relive yourself from a mental tension as well as financial burden.