Secured and Unsecured Loans

Qualifying for unsecured bank loans

Unsecured bank loans are loans granted without the security of a collateral. Designed for people who don’t have an asset to guarantee the repayment, this loan is usually offered after a careful analysis of the applicant. To qualify for an application, you should be over 18 years old, have a bank account and a fixed income. To evaluate the probability of you returning the loan, the bank will take into account your credit rating, any other debts, any possible savings accounts.

What you should be looking at

On unsecured bank loans, the interest rate, monthly payment and refunding period are usually fixed. Since it ‘s possible they don’t match your capabilities ,you should compare rates, terms and fees from several lenders to find the best unsecured loans. Here are some factors to evaluate carefully to pick the loan that suits you perfect:

• Interest rate: a lower rate means a lower cost of the loan;
• Loan length : since it is fixed, you should go for that one that fits you better;
• Monthly payment : it is obvious you should choose one that leaves you with money for other expenses at the end of the month;
• Total interest you pay on the loan: roughly, it is the amount paid over the initial loan ;it’s calculated between the interest rate,the amount borrowed and repayment period;
• Whether you can pay early without any penalties;
• If there any other (hidden) fees : loan origination, loan granting, late fees;
• How are penalty fees calculated and when will they be assessed ;
• What methods can be used for monthly payment: are online check payment possible or just direct debit;more options mean more comfort for you;

Conclusion: don’t be lazy. Shopping around can save you money on both short and long term.
When deciding for a non secured loan ,don’t consider just one variable, but try to see the overview.

This entry was posted on Monday, July 19th, 2010 at 9:06 am and is filed under Unsecured loans. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.