| For personal needs, personal loans are most suitable. | | | | by all - tenants, homeowners, property owners and |
| Available in both secured and unsecured form, this loan | | | | students as well. Availed without pledging collateral, the |
| category provides suitable credit solutions for both | | | | advantages of this sub-type are no time-consuming |
| short-term and long-term needs. Besides, its flexible | | | | property evaluation procedure leading to less |
| nature, adds-up to its popularity. | | | | paperwork and quick loan approval. |
| The secured type of personal loans can only be | | | | Absence of collateral not only speeds-up the entire |
| availed by homeowners and property owners. Availed | | | | procedure, but makes it a safe contract too. That is, if |
| by pledging collateral, the advantages of this sub-type | | | | the borrower defaults to payback as decided then |
| are quick attention, high credit range (as high as | | | | there is no immediate risk to his property or valued |
| £250,000), low interest rates (as low as 6.7%), | | | | item. Legal action is the only thing a lender can do |
| diverse payback rates and methods, and negotiable | | | | against a defaulter. |
| loan terms and conditions. | | | | The drawbacks of availing unsecured credit are limited |
| Presence of collateral ensures that the borrower pays | | | | credit range (as restricted as £25,000), |
| back as agreed - an assurance for the lender. | | | | comparatively high APR (as high as 41%), fixed rate |
| However, if the borrower defaults to payback as | | | | plan and payback method and non-negotiable loan |
| decided then the lender can seize the pledged | | | | terms and conditions. |
| collateral - a risk for the borrower. Another inseparable | | | | Based on the above-stated comparative study, it is |
| limitation of secured credit is that the time-consuming | | | | clear that secured type of personal loans is most |
| property evaluation process slows down the overall | | | | suitable for 'big and long-term' monetary requirements, |
| loan approval procedure. | | | | whereas, unsecured type is most suitable for 'small |
| The unsecured type of personal loans can be availed | | | | and short-term' monetary requirements. |