Secured and unsecured loans

With the current state of the economy, and with the growing need to manage one’s finances effectively, loans are definitely inevitable. Since there are a number of available loans, especially for employees and company workers, it would really be good to know the various types of loans and the most appropriate one for you considering your monetary needs. Read the articles below and compare payday loans and other kinds of financial assistance. Practically every detail about loans is tackled here—from the nature of loans down to different modes of payment.

What are loans and how do they work? This question can be very confusing. Most people come to a point in their life when they need a loan. Some need it to purchase a new house, some to buy a car and others to start-up a business. Whatever the need, before you get into a financial commitment, be sure you understand what terms like secured bank loan or unsecured loan rates mean, in order to get the best deal and avoid costly mistakes. This site is meant to offer you valuable information about secured and unsecured loans. Here you can learn about different types of loans available on the market, find which one suits better to your needs, and how to compare different loans to save money.
Loans divide in two major categories. Let’s find out more about each one:

What is a secured loan

A secured loans is backed up by some asset or collateral belonging to the borrower (house, car, real-estate). This means that the borrower guarantees the money he loans with a property of higher value. If the borrower defaults on the loan (fails to repay), the asset will be forfeited to the lender. Because the lender takes less risk, secured loans provide larger amounts of money than unsecured loans, lower interest rates and better terms and conditions.

Random blog entries:

Lately lenders have become less and less trusting due to the large numbers of defaults. Unsecured loans have become intangible for those without outstanding credit rating. Unless you already had a business relationship with your lender and have proven your quality, most likely you won’t be able to get anything but a bank secured loan.
[…] read more

Poor credit is a reality of our days. These economically troubled times have driven many people in situations which affected profoundly their credit scores. They have been left to face day-by-day the results of bad credit: getting rejected on loan applications, being declined by banks or mortgage companies. Still, there is a chance to obtain the much-needed funds. […]read more

The second largest purchase made by people in their life is an automobile. With an average value of a few thousands of dollars, this is not something you buy whenever you get a paycheck. But sometimes you just don’t have the time to wait and save up money. […]read more

More posts…

Types of secured loans:

Home Equity Loan

Cash Secured Loan

Auto Loan (New and Used)

Home Improvement Loan

Secured Business Loan

Some of the advantages of secured loans:

  • they are easier to obtain, compared to loans without guarantees (because the bank is covered)
  • can provide larger amounts (depending on the property brought in as security – up to 75%*value)
  • smaller monthly payments
  • can be obtained even with a bad credit

Disadvantages of secured loans:

  • risk over the collateral (house,car);
  • very long repayment period (up to 30 years);
  • large total of interest (due to the extended repayment period);

Before you take a decision, calculate a budget to make sure you can repay the loan. If you don’t know how, ask someone for help. You should also consider insurance for unexpected events (accident, illness, temporary or permanent incapability). These are usually offered by the lender at the time of the loan, but they can be expensive, so you could get a quote from an independent financial adviser.

What is an unsecured loan

An unsecured loan is a loan prepared for people that are unable to guarantee the loan, either because they do not own a property, either because they do not want to risk it. Since the loan is not secured, it’s more difficult for the lender to get the money back if the borrower cannot repay, this resulting in a increased risk. The applicant’s income and his credit score are influencing the amount of money that can be loaned, the rate and the repayment terms. That is why the loan amount and conditions vary from individual to individual.

A few types of unsecured loans:

Personal Unsecured Loans
Unsecured Business Loans
Unsecured loans for people with bad credit
Payday loans

Benefits of unsecured loans:

  • no need for collateral
  • shorter repayment periods (that can be a disadvantage too)
  • No risk over a property

Disadvantages of unsecured loans:

  • may be difficult to get with a bad credit rating
  • provide only small to medium amounts
  • increased interest rates
  • small flexibility on terms

So, secured or unsecured loans? You’ll have to choose based on your status and capabilities. If you’re unsure what to choose, keep reading.
This is just a brief introduction. You can find more secured and unsecured loans information browsing through the articles in our website. Enjoy and don’t forget to leave your opinion!