Personal loans provide non-homeowners with loan options!
For the 30% of us that don’t own their own home and are either private tenants or have a council house, the types of loan available to us can be a little limited. As we have no large asset to secure a loan against, we can really only take out an unsecured personal loan if we need more money than we currently have.
You can probably guarantee that piece of direct mail will plop on your doormat once a week advertising the fantastic personal loan deal that a particular company has. Fierce competition in this arena has driven interest rates down and although you may not benefit from such great rates as a homeowner loan, you are still eligible for some pretty juicy offers.
Low down on a personal loan to keep you in the know:
| | 1. This loan is an unsecured loan, meaning that it is not secured against an asset that can be taken away if you default. The lender will have to take you to court to try and recoup costs if you fail to make several monthly repayments.
2. Interest rates will be higher than a secured loan as the lender has nothing to secure the loan against. If you have a bad credit history then you may only be able to apply for a bad credit personal loan.
3. A personal loan can be used for what you want. Many lenders will ask what you plan to use the money for but all they are really interested in is making sure you are credit worthy.
4. The amount you can borrow varies between each lending company, but can be as much as £50,000.
5. Most lenders require that the money is paid back within a maximum of 10 years. Don’t forget that the longer you make the term of the loan, the more interest you will pay!
6. An unsecured loan can either have a fixed or variable interest rate. If it looks as though interest rates will decrease over the life of the loan then you would be wise to take out a variable rate loan. If it looks as though interest rates will increase, a fixed rate personal loan could be a better option for you. |
What else is a personal loan known as?
| | 1. Tenant loan.
2. Unsecured loan. |
Who can provide you with a personal loan?
Banks, building societies, supermarkets, specialist lenders and a raft of online lenders to name but a few. We have provided you with a few examples of companies to enable you to compare some of the tantalising personal loans that are on offer at present.
