Many people don’t know but ‘personal loans’ is the generic term for all loan types. All loans fall under either one or the other personal loans category. Personal loans fundamentally are of two types – secured and unsecured loans.
Secured personal loans will like a security to be attached to them. The security usually is in the form of home but alternative collateral are also accepted. The loan amount with secured personal loans is usually more. You can borrow more at lower interest rates. The obvious drawback that everybody encounters is the loss of property if they fail to make repayments.
Unsecured loans do not require attaching any collateral. They are meant for everybody who cannot provide collateral, either by choice or compulsion. They take lesser time in being approved but are much favourable for lesser loan amounts. Everybody applying for unsecured personal loans will get comparatively higher interest rates. This is because no security is supplied for them.
Loan amount for personal loans:
Personal loans amount that can be approved extend from £5,000-£75,000. Everybody will be approved for have different amount. As secured personal loans, borrowers can get up to 125% of property value.
Loan term for personal loans:
Loan term will move from 3-25 years. Loan term for personal loans will depend on loan amount. For a lesser time span like six months, you should be looking for credit card as an alternative. Don’t stretch your personal loans. This is so because you may be paying more in form of interest rates.
Interest rates for personal loans:
Interest rates for personal loans will not be same for everybody. Interest rates are subjective and will depend on your financial circumstances. Everybody should be looking for APR when shopping for interest rates for personal loans. APR is the annual percentage rate is the interest rate which takes account any additional fee. But with rising competition few lenders charge additional fee.