Posts published during December, 2010

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December 29, 2010

Unsecured Loans for Tenant-Risk Free Money for Teenager

Obtaining a loan in present scenario is a cakewalk to homeowners but things get a bit murkier for tenants to attain usual loans. To ease them and extract the customer base inclusive of tenants, unsecured loans for tenant have been designed. These loans serve one with cash when he is stung by the deficiency of the same.

Features and uses of loan

Tenant can use this loan for various purposes like purchasing a brand new car or bike, going for an exotic holiday, consolidating debt, buying a new flat or apartment, expenses in your dear ones wedding, etc. As stated earlier unsecured loans for tenants fall under category of unsecured loan, so you need not have to put anything as collateral here. But as lender is at higher risk, the rate of interest is slightly high also the repayment period is shorter. You can procure an amount varying from500 to 2500.Having a good credit history will help you obtain higher amount. The interest rate lies somewhere between 7.7% APR to 18.3%.Being informed and good groundwork like visiting various lenders will definitely help you in negotiations.

Eligibility and availability

Any type of tenant can apply for this kind of loan. You may be Council tenants, Private tenants, housing association tenants, or even tenants living with parents. In order to get loan you must also fulfill these criteria: you should be in salaried employment presently when yon you go for obtaining loan, You must have resided at your current address for over 12 months, You should have your personal U.K. bank account, having a creditstore card, You have a savings account to which you make regular payments. You can apply for this kind of loan to traditional money lenders or bank, or else you can apply online. Applying online saves your time and it also consumes less processing time. So just fill some simple forms and you have applied for loan.

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December 22, 2010

Unsecured Loans: Route to Finance in the Absence of Guarantee

Unsecured Loans: Route to Finance in the Absence of Guarantee

Does yours being a tenant or a homeowner with insufficient equity imply that loans and other methods of financing cash-shortages are not meant for you. Loan providers do not reveal such stark indifferences towards borrowers who come for unsecured loans. However, the terms on which unsecured loans are offered clearly show the apathy on the part of loan providers.

Unsecured loans are personal loans where lender lends money without any direct stake on any asset of the borrower. This is the peculiarity of unsecured loans. It was this feature of unsecured loans, i.e. not having any direct stake, that was preferred most by borrowers. When seen in comparison to secured loans, the unsecured loans appeared a much better method of drawing finance because the borrowers assets were safe in this arrangement.

When unsecured loan does not consume the equity in home, the equity can be utilised for getting finance through other loans.

The safety of home or any collateral pledged under a loan is so prominent that borrowers would prefer to pay a higher rate of interest on an unsecured loan. Since there is no collateral to back the repayments of unsecured loan, the risk involved is much higher. The loan providers charge a higher rate of interest in order to compensate for the risk. The interest rate corresponding to the cost of inflation is more or less similar to the secured loans.

However, interest rates chargeable on unsecured loans are well defined by principal banks and financial institutions. Loan providers who are charging more than this rate without any justifiable reason are only overcharging borrowers.

Unsecured loans are offered against the faith induced by the borrowers through their credit report. Credit report is a list prepared by two of the most important credit reference agencies in the UK (Experian and Equifax) of all credit transactions entered into by every customer. Thus, even small debts on which payment has not been made after due date and where the creditor has complained about this to the County Courts, the borrower will have a bad remark on his credit file. A large number of defaults, County Court judgements, Individual Voluntary Arrangements, etc. will be considered as a lack of reliability. Getting unsecured loans will be a little difficult for these borrowers.

The major customer group of unsecured loans comes from the tenants and the other homeless people. Homeowners too have begun using unsecured loans in order to save them from a direct claim on home. Unemployed people constitute another big group of users of unsecured loans in the UK.

Apart from interest rates and certain other terms like the making of collateral superfluous, unsecured loans are very similar to secured loans. The methods that are available for repayment of unsecured loans are similar to secured loans. The amount to be repaid will include the actual loan amount, interest for the period, and any other fees charged by the borrower. Borrower will decide how he wants to repay the whole of the amount. Paying the entire amount within a small time will save on interest cost. However, it will be difficult to arrange the amount immediately. Another method will be to pay the loan through monthly instalments. For this method, the total repayable amount is divided into the various months that constitute the term of repayment. A slight modification of the above method is where only interest is required to be paid by the borrower. The borrower pays the balance of the loan at the end of the term.

Borrowers who want to have a faster sanction of the loan amount will find unsecured loans more beneficial. Since, no collateral is required to be offered in unsecured loans, the step involving valuation of the asset can be safely eliminated, thus accelerating the pace of approval.

An unsecured loan does not guarantee that assets, and more specifically home, will be spared the consequences of non-payment of the amount due to the loan providers. The only difference in case of unsecured loans is that loan providers will not be able to directly stake a claim for liquidation of any asset. The loan provider will have to adopt the litigation route to recover the unpaid amount. This method can be expensive and time consuming. In cases of bankruptcy, unsecured loans are repaid only after all the secured loans have been repaid.

Taking informed decisions with proper guidance from experts will ensure that unsecured loans do not become troublesome in the long run. There are many loan providers and independent financial advisors who will consider the case of borrowers properly and thus recommend proper unsecured loans.

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December 15, 2010

Unsecured Loans – Financial Blessing Without Pledging

Unsecured loans are good for people who are not homeowners and unable to obtain a secured loan for example; a tenant living in rented accommodation. There are a few things to consider before applying for these loans. These loans are invariably more expensive than its counterpart loans. And the repayment periods demanded by lenders upon are shorter too.

The reason behind this is because creditors have no guarantee that you can repay the loan. Therefore, they charge you more in interest to cover the cost of insurance policies that they need to take out to protect them should you default on repayments. In the event that you do not pay off, the lender makes appeal to the terms of the legally-binding credit agreement and pursues the borrower through the legal system.

Generally, amount obtained by the borrowers for these loan provisions is

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December 8, 2010

Unsecured Loans A Beginners Guide

If you are not a home owner and you want to borrow money then your best bet will be to look at unsecured loans products. These loans are available to all us home owner or not and offer a quick and easy solution when it comes to borrowing money.

As their name suggests unsecured loans dont need to have any security behind them when you take them out. So, they can suit home owners and tenants alike as you dont need to have any property to be used as collateral for this kind of borrowing. In general terms these kinds of loans are quick and easy to arrange and are often used for smaller loan sums although many will offer high value sums nowadays.

If you apply for unsecured loans then your lender simply needs to check out your finances. So, for example, many lenders will look at your current income and outgoings and theyll also credit check you to see how youve managed your money in the past. And thats it once you have passed those checks youll qualify for the loan you want. It just doesnt get simpler than this!

You can even take out unsecured loans if youve had financial problems in the past. Some lenders will even give out loans without doing a full credit check if thats what you prefer. It is, however, worth noting that an unsecured loans deal that is given out without a credit check will cost you more money in the interest rates that youll be charged so this option should only be used if you have no other choice.

One thing that riles many people when it comes to taking out unsecured loans is the fact that they are given higher rates of interest in most cases than secured loans. This can actually be avoided if you play it smart and shop around for deals. There are so many lenders out there in the sector right now that want to give out unsecured loans that rates drop all of the time. And, if you shop for unsecured loans online you will qualify for specific online offers that could save you even more.

The fact is that looking at unsecured loans over the Internet is probably your quickest route to finding a good deal. If you use a broker site or a comparison portal, for example, then you can get quotes from all kinds of lenders for the best unsecured loans deals in just seconds or minutes. All you need to do is to select the cheapest and apply!

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December 1, 2010

Unsecured Loans

When looking for a personal loan, borrowers normally have two options to choose from – unsecured personal loans or secured personal loans. Unsecured loans are loans where the borrower does not have to officially put down any collateral against the loan. They are open to both homeowners and tenants, although some providers of unsecured loans prefer to deal only with homeowners. The amount you can borrow on unsecured loans is generally limited to a maximum of 25,000. It is also unlikely that you will be able to obtain an unsecured personal loan for amounts of less than 1000.

Secured loans on the other hand provide borrowers with the ability to borrow more than 25,000 on a personal loan. They are almost exclusively open to homeowners as a form of collateral is needed to place against the loan. In most cases this collateral is the borrower’s home or equity in the borrower’s home.

Both secured loans and unsecured loans can be arranged through a large variety of lending sources, including high street banks, Internet lenders and building societies. With so many sources to choose from it can sometimes be difficult to make the decision on who to obtain your loans through. Here are some points to consider in order to help you make that decision: -

APR – The APR is the annual percentage rate – i.e. the rate of interest that you will pay on unsecured loans once any introductory rates expire. The APR will essentially dictate how much your unsecured loan will cost – the lower the APR then the less you will end up paying for your unsecured loan. You should also watch out for APR charged on a sliding scale. Some loans companies only offer their headline APR rate once the borrower commits to an unsecured loan of ‘x’ amount. Smaller loans are often charged at a much higher APR, which can be more than triple the headline rate.

Fixed or variable rates – Most unsecured loans are available on a variable APR. This means that the interest rate may go up or down to reflect changes in the base rate as set by the Bank of England. However, some loans companies are offering unsecured personal loans at fixed interest rates. The fixed rates are initially higher than the variable rate, but will protect you from future increases in the standard APR rate across the life of the unsecured loan.

Credit arrangement fees – Some lenders of unsecured personal loans will charge a credit arrangement fee and administration fee for setting up your loan. Other lenders may waive one or both of these fees, saving you money.

Online application form – Does the lender have a user-friendly online application form? Using an online application form is often the quickest route down which to apply for an unsecured loan.

Processing time – How long will it take for the lender to give you a decision on your application? Some lenders offer instant decisions on unsecured personal loans.

Loan payment protection – Most lenders offer to protect the payments on your unsecured personal loan in the event that you are made redundant or are unable to receive an income because of illness. The cost of loan payment protection can vary significantly between lenders so if you are considering taking out loan payment protection make sure it is not going to cost you an arm and a leg!