Thinking about borrowing money? Well, you need to consider carefully all your options which include the following:
- The amount you want to borrow
- The current interest rates
- Your current obligations
- Terms and condition of repayment
There are 2 choices to choose and these are the secured or unsecured bank loans.
Here are some explanations if you choose the unsecured bank loans. When applying for this kind of bank loan, the lender believe that through your financial income bases, you can repay the loan without specific asset as collateral such as property, car in case you cannot repay your loan.
Although be aware that the interest rates of this kind of bank loan have higher interest rate compare to secured loan and the amount you can borrow is limited or lower amount. The categories offered of unsecured bank loans are the following: Personal loans, Personal lines of credit, Home improvement loans and Student loans.
The secured bank loan is opposite to unsecured loans. This kind of loans has lower interest rate compare to unsecured loans and you need to have collateral in order for you to borrow the amount of money you need such as car, house or other property or valuable asset you have.
The amount you can borrow is higher and at same time with longer terms. And if ever you cannot pay your loans, automatically they will get or pull off your collateral and sell it to pay off your loan.
In regards to personal line of credits, it means that your credit record is good, have at least credit score of 620 or above. The better and your line of credit is tied to one of your checking account or bank deposit.
Usually the common information requires by the lender is your name, age, gender, home address driver’s license number, social security number and bank information as well.
The reason for the secured bank loans to have collateral is to make sure that you will pay your loan according to the term and conditions. The categories of secured bank loan offered are for Home equity loan, Auto loan, Home improvement loan, Recreational vehicle loan, boat or yacht loan and home equity line of credit.
When talking of collateral, this was valuable things or asset you have and this can be:
- House or real estate
- Car or other vehicle
- Other valuable items
So before you have your loan either secured or unsecured, be sure to think it twice and the most important thing is your financial statues or your financial income if it can cope with the payment in case you will borrow money or have bank loan to avoid overdraft.
Remember that when you have unsecured or secured bank loan, which ever you choose, use the money wisely and don’t over spend so that you will not regret in the day of repayment.
As to what you always hear, “money is the root of all evil” but that’s not true since money is money and it has no brain telling you to spend. It’s the person itself that has the brain who hold the money and must know how to control their urge to spend especially to unnecessary things which are not important.