Of the various types of loans that are available today, there is no doubt that personal loans are the most popular and most sought after. This is because of the convenience factor that is attached with these types of loans. They are unsecured, are easy to apply and get and the interest rates are also very low compared to credit cards. They come in very handy for a number of uses and since the end use is not asked, it can be put to use for almost any purposes.
However, in some cases where the amount of funds needed is high, then you could even go in for secured loans. These types of loans are basically put to use to retire high cost credit card debts and other private loans where the rates of interests are very high. It is very important to find out ways and means to study these loans very carefully before committing yourselves to it. Loan agreements should be carefully gone through and you should be very careful about the fine prints, especially with regard to processing fees and pre-closure charges.
There are some specific guidelines which need to be followed when you are in the process of taking personal loans. It would make sense to have a closer look at the same in the following lines.
What to look for in loans
There are quite a few things which must be looked into carefully before availing loans. The most important is without doubt, the interest rates. You should have the patience to do some window shopping and pick up at least five or six banks and financial institutions and compare the interest rates closely. You should also have a look at the processing fee that is charged and any other hidden charges that could come as a surprise to you later.
The next important thing is the loan amount. There are personal cash loans available for small amounts limited up to $1,500. On the other hand you could also try and get loans of around $10,000 provided you are able to prove your repayment capacity and have the kind of income to service such loans.
Importance of credit history
Since most loans that are granted are unsecured loans, banks and financial institutions are very particular about the credit history of the borrower. Hence, if you wish to get the maximum amount from a loan at the best interest rate, you should take pains to ensure that your credit history is unblemished to say the least. This would depend on your past repayment track record and if it is bad, the same is bound to haunt you in your quest for generous loans at cheap rates.
When to go in for secured loans
You could go in for secured loans or caveat loans when you are faced with the problem of a number of high cost loans which you are not able to manage and service properly. You could then think of taking a single big loan with collateral. This will come to you at low interest rates and help you to get rid of the high cost personal loans and credit card does.