Loans - Finding The Most Suitable For Your Circumstances

by : Louis Rix

When it comes to loans there are many to choose from and finding the one most suitable for your needs can be a daunting task. However with a little help and advice by way of a specialist loans website you can break them down and they do become easier to understand. Once you have decided which type of borrowing would be suitable, a specialist can find you the cheapest rate of interest and best deal.

There are two main options when it comes to the personal loan. These are the secured and unsecured. Both have advantages and disadvantages. With the secured loan you can usually borrow a larger sum of money than with the unsecured. You can also take the loan out over a longer period of time. The interest rate is also lower but the downside is that you do have to "secure" something against the amount you are borrowing. This is usually your home and of course if you should default on the loan then you risk losing it.

With the unsecured loan you do not have to put anything up for security. However the interest rates will be higher than that of the secured and the amount you are able to borrow will be limited.

One of the biggest factors that are taken into account when applying for loans is your credit rating. If you credit score is high then you are able to take advantage of some of the lowest rates possible. However if yours is poor then you could find a lender is very reluctant to take a chance of you.

In the case of individuals whose credit rating is low then all is not lost; there are loans for those with bad credit. A bad credit loan may be your only choice and this will usually be offered as a secured loan. While you will not get access to the lowest rates of interest it is possible to repair your credit rating by keeping up with the monthly repayments on the loan.

With any type of borrowing it is essential that you remember the golden rules when taking out a loan. These are: only borrow as much as you need and take the loan over the shortest terms possible. By doing so you are lessening the chance of getting above your head. You should always work out your finances and come to a figure that you know you can afford. Once you have done this you are able to work out how long to take the borrowing over, keep in mind the lower the longer you take it for the lower the monthly repayments but the more interest is added on.

Loans do come with terms and conditions and you have to read these from top to bottom. Not only will the small print tell you how much in total you will be repaying but also if there are any fees added onto the borrowing. Some will come with early repayment fees; this means that if you take a borrowing over, say 5 years and can repay it within two years, then you may liable to pay an early repayment fee which is usually around two month's interest.