Wednesday, 17 July 2013

Personal Loans-Successfully Navigating Through The Loans Maze

When you need some extra money, a personal loan might be right for you. You could need money to take a fabulous holiday, or you could need money to consolidate your debts. Other reasons you might need some cash include home improvements, car repairs or medical expenses. Whatever the reason, a personal loan can provide you with the cash you need. Depending on your situation, there are several personal loan options, so you need to choose the one that is best for your financial situation.

Personal Unsecured Loans

If you need a significant amount of money, you can go online to find a lender that will offer you unsecured personal loans. The main thing these lenders will look at is your credit score. They will see if you make payments on time, and they will look at your debt-to-income ratio. If you have a low credit score, you will probably not qualify for this type of loan. You will also be asked to provide proof of employment. You can apply for a loan online, and you should be approved fairly quickly. The money will be directly deposited into your bank account.

Payday Loans

If you have bad credit and need money fast, this might be the best option for you. A payday loan is a temporary loan that needs to be paid when you receive your next paycheck. In order to qualify for a loan, you must be at least 18 years of age, and you must be a citizen of the UK. You also need a steady source of income, and you need a current checking or savings account. You can easily apply online, and you will receive the money in your checking or savings account within 24 hours. The disadvantage to a payday loan is that the interest rate can be very high. You should not apply for a payday loan unless you are confident that you will be able to pay the loan on time or you will be charged additional fees. These types of loans are designed to help you if you are in a deep financial jam.

Secured Personal Loans

A secured loan will help you obtain the lowest interest rate. The most popular type of secured loans is a home equity loan. You will use the equity in your home to acquire a loan. The process is much like applying for a mortgage loan. You will need copies of your pay stubs, bank statements and tax information. Some lenders might want to do an appraisal of your home. The lender will conduct a credit check, so you might not qualify for a loan if you have a low credit score. Keep in mind that your home will be used as collateral, so if you default on your payments, you could lose your home. If you have a good credit score, you can get a low rate on a home equity loan, so you need to search online for reputable lenders who will offer you a loan.

Personal loans are beneficial when you need cash. If you need a loan, you need to research your options to see which type of loan suits your needs. You will then receive the cash you need, and you can use the money for whatever you wish.

… written by John Rutherford is a passionate blogger who provides debt guides and covers the latest finance news over at Financial News Group.

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