Giving loans is one of the oldest businesses in the history of mankind. Giving loan is a simple process where one person lends money to another person and in return the other person can pay this money back after some duration with some additional money as interest. In current times, the concept of loans is still the same but the terms and conditions make it a very complex process.
Generally speaking, there are two kinds of loans present in current financial market. These are called secured loans and non-secured loans (unsecured loans). The first type of loan is a secured loan in which the lenders lend money to borrower only when the borrower keeps some kind of collateral. This collateral can be anything valuable like house, property, car or jewelry.
This kind of loan is easier to get since the lender is at lower risk of loosing his money. Secured loans are relatively cheaper due to these reasons as well. That is another reason these loans are popular among people having bad credit history.
The other type of loan is called unsecured loan or non-secured loan. In this type of loan, the lender lends money to the borrower based on his credit history and his face value. There is no collateral which is deposited with the lender. Since the loan is risky for the lender, therefore the interest rates are high in these types of loans. The interest rate and other terms can be very strict or easy depending upon the credit history of the borrower. If the borrower has a track record of making payments on time for all his other loans and bills, then he may get the loan cheaply.
Which loan is more suitable for you would depend on your need and past credit history? In case you have a good credit standing, you should go with an unsecured loan since you won't have to provide any kind of collateral. If the credit history is not so good due to some reason, the secured loan is a better option. - 29904
Generally speaking, there are two kinds of loans present in current financial market. These are called secured loans and non-secured loans (unsecured loans). The first type of loan is a secured loan in which the lenders lend money to borrower only when the borrower keeps some kind of collateral. This collateral can be anything valuable like house, property, car or jewelry.
This kind of loan is easier to get since the lender is at lower risk of loosing his money. Secured loans are relatively cheaper due to these reasons as well. That is another reason these loans are popular among people having bad credit history.
The other type of loan is called unsecured loan or non-secured loan. In this type of loan, the lender lends money to the borrower based on his credit history and his face value. There is no collateral which is deposited with the lender. Since the loan is risky for the lender, therefore the interest rates are high in these types of loans. The interest rate and other terms can be very strict or easy depending upon the credit history of the borrower. If the borrower has a track record of making payments on time for all his other loans and bills, then he may get the loan cheaply.
Which loan is more suitable for you would depend on your need and past credit history? In case you have a good credit standing, you should go with an unsecured loan since you won't have to provide any kind of collateral. If the credit history is not so good due to some reason, the secured loan is a better option. - 29904
About the Author:
The author is an expert on loans and suggests on different types of loans including secured loans and non secured loans.
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