Tag Archives: risk
Secured Loans and Unsecured Loans- What's the Difference?
Whether you’re new to the world of financing or you’ve done this a number of times before there’s always more to know about your options and what is out there so you can decide what will work best for you and your circumstances. One of the first basic decisions you have to make is whether you want to apply for secured loans or unsecured loans, so, what’s the difference? This article goes over where these options differ so that you can decide what is important for you and your financial situation.
Unsecured loans are based on your financial background, focusing on your income, and your credit history. This is all they have to look at and base their decision to lend to you on. When a lender looks at your credit history they are trying to decide how much of a risk you represent—the risk being that you won’t make your monthly payments on time. When you have a lot of late and missed payments in your financial history this tells them that you are likely to not pay on time. When you are considered a high risk applicant they are less likely to approve your application at all, and when they do, the worse your credit is worse the higher the interest rate they offer you will be. Another key difference when compared to secured financing is that they are much faster to get approval for because there is no evaluation process. All they have to look at is your history and your income, which won’t take them long to judge.
Secured loans are also based on your financial background, like your income and your credit history, but use collateral in addition. The collateral takes the pressure off of your financial history, but that history does still matter. The collateral will be taken if you fail to make your payments. Because there is a way for the lender to recover their money they will be much more likely to approve your application with an iffy credit history, and are going to offer you a better interest rate than they would otherwise. It does take a bit more time however because whatever you are using for collateral has to be appraised to determine it’s worth.
So what option works best for you? This depends on what your needs are exactly. Everyone wants the best interest rate they can get! But is approval time important, and what is your financial history like? These are questions you should ask yourself before determining what is the right path for you when you’re looking at secured loans and unsecured loans.
Enterprise Risk Management in Business is used by Organizations to Manage Risks
Risk Management is about taking the necessary measure to seize opportunities and manage risks in business. There are many risks involved in the operation of business, which could affect the stakeholders within the enterprise. Some of these risks include Hazard Risk, Financial Risk, Operational Risk and Strategic Risk.
Enterprise Risk Management employs methods and solutions to address these risks and achieve the business’ goals and objectives. There are many risks including internal and external factors that need risk management solution. Risk management solution provides an enterprise risk management by integrating documentation and assessment of risks, defining controls, managing audits, identifying issues and implementing recommendations and remediation plans. The risk management solution includes powerful tools for risk analysis and monitoring such as configurable risk calculators and risk heat maps.
Risk management delivers effective management control through increased shareholder value, optimized risk or returns outcomes, reduced compliance cost and improved business performance. Because of the risk management solution, an enterprise or business would be able to put goodwill in its brand or output and have a premium over its holdings in the market. Furthermore, the increased visibility of risk in the enterprise provides the management a better internal control to address the risk.
If a bank grants wholesale lending to a particular enterprise, it would post various risks. And if the enterprise risk management is weak, a possible leak and business disadvantage would occur within the business, which is why tracking of collateral is needed to identify and provide quick and prompt method of eliminating errors of information. Tracking of collateral for wholesale lending automates the identifying of deposit to be collateralized and communicates the collateral requirements to the Treasury group. The treasury group that relies on the tracking of collateral reports will be able to calculate the interest and value involved in the wholesale lending. A management control within the business of wholesale lending by a bank does not only post benefits to the enterprise but also to the stakeholders within.
It maybe that an enterprise fails to measure the risks in its operation, which consequently affects the overall brand or image of the business. However, if risk management is applied, there is no reason for the possibility of leakage and weakness. There are many risk management systems solution available for various types of enterprise. This system solution is an automated system that measures the risks within the enterprise and provides methods and processes to seize the opportunities rather than failing to take the advantage. The system usually involves identification of particular events or circumstances relevant to the organization’s objectives, assessment of risk and opportunities in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress.
There are at least eight known components of framework for risk management, this include internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication and monitoring. The framework suggested would only be possible and attainable if implementation is strong.
The likelihood that a business would achieve its goal is dependent on the risk management and measures employed by every enterprise. Seizing opportunities is the key to a business growth.