Personal Loans

About Personal Loans

Did you know that your home's equity is one of the best sources of cash? Interest rates are typically quite low. With equity, you can finance big-dollar expenses, such as car purchases, home remodelling, or medical expenses. Of course, you are funding these things with a secured loan if you chose to use equity; your home is the collateral. But, if you have the discipline to make the payments, you can save a lot of money over using credit cards.

Unsecured Loans

An unsecured loan is a loan that is backed by your signature .When you borrow money, the lender may require nothing more than your promise to repay the debt. Unsecured loans usually involve less documentation.

Obtaining an unsecured loan is usually quicker and does not require a formal closing. There is usually just an application, a promissory note, and perhaps a payment schedule. This differs from a loan involving collateral. As any homeowner can tell you, you can get writer's cramp signing all the papers that are required to document a mortgage or home equity loan.

What is a secured loan?

A secured loan is a loan backed by collateral. When you borrow money, the lender may or may not require you to pledge collateral to guarantee repayment of the debt. If collateral is pledged, then you have a secured loan.

Collateral can be anything of value. (It can be money, real estate, automobiles, future interests, personal belongings, business assets, livestock, or anything else that has worth.) If you do not repay what you borrow, then the lender may use your collateral to satisfy the debt.

For instance, your home mortgage is a secured loan. the TV. This is the same whether you buy the TV using an unsecured credit card, such as Visa, or funds from a personal bank loan. You can sell the TV. You can ship the TV overseas. You can smash the TV.