Known as the needy friend of the borrower, personal loans are used to meet the financial requirements of the customer. Basically known as umbrella loans, personal loans are available at any time and there exist no restriction on the usage of the loan amount.
The classification of personal loans
These loans are further classified into secured and unsecured loans according to their nature. The loans that are secured against any assets are called secured loans. It provides interest rates starting from 6.7%. Also there exist multiple choices in repayments and interest plans. According to the data available from the Bank of England, secured loans are becoming more popular these days with the secured borrowing reaching £ 14.5 billion in the last three months of 2006. Unsecured loans are usually preferred by those who do not have any collateral. It is known for providing competitive interest rates. Also it has fast approving and accessing process.
A couple of facts on personal loans
The numbers of women preferring personal loans are much higher than men.
Unsecured loans above £ 20 billion are owed by women.
Male customers' outcome female in grabbing personal loans to own cars.
Availability and the uses of personal loans
Personal loans can be made available from £ 500 to £ 250,000, and can be repaid between the time limits of 12 months to25 years. As is possible to take at any time, personal loans are the most convenient method of raising money. It is useful in purchase of cars to home improvement to holidaying.
Classification on the basis of repayment
Personal loans are again classified on the basis of their repayment into three types, instalment, balloon and single payment loans. Installment repayment loans are repaid through monthly instalments, while balloon loans are those repaid at regular intervals. In the case of single repayment loans, the entire amount along with the interest is paid at the end of the loan period.
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