How to Choose Between Secured or Unsecured Loans: What are the Pros and Cons of a Secured or Unsecured Loan?

Borrowing money via a loan may seem simple in principle but may be a little harder in practice. Before choosing a lender consumers need to decide whether to opt for secured or unsecured loans. Are there are any qualifying criteria and what are the advantages and disadvantages of these products?

What is the Difference Between a Secured and an Unsecured Loan?

Secured finance is given on the basis that the individual has some form of security that they can use to guarantee their borrowing. This will most often be their home but other items of high value may be used with some products.

Unsecured finance, on the other hand, doesn’t need the individual to “own” anything to borrow money. So, this avenue is open to tenants and to homeowners that prefer not to use their property in the lending process.

 

What are the Advantages and Disadvantages of Secured Loans?

The fact that a secured loan gives the lender a guarantee that they can get their money if the individual reneges on their agreement makes its terms more favourable in general. The advantages of this product may include:

  • Better interest rates and more fixed rate options.
  • Longer loan terms.
  • Larger borrowing limits.
  • An increased likelihood of approval for borrowing.

But, there are also some downsides to secured lending. The main disadvantages to this kind of loan can include:

  • If the individual does not or cannot meet their loan commitments then they may put their home at risk of repossession.
  • Borrowing over longer terms can also add to the overall cost of borrowing.

If secured loans are not an option or the individual prefers a different route then they can also consider unsecured finance.

What are the Advantages and Disadvantages of Unsecured Loans?

Many favour this kind of solution because it does not involve using their home. Non-homeowners may, of course, have this as their only option. The advantages of unsecured finance may include:

  • Not having to risk using property as a guarantee.
  • Access to quick, often shorter term, solutions for smaller borrowing needs.

There are, however, some disadvantages to this solution. For example, the individual may find that:

  • They stand less chance of getting loans approval, especially if they have an impaired credit history.
  • They may be charged higher rates of interest.
  • They may not be able to borrow high sums for as long a time.

The ultimate decision made will very much be based on the individual circumstances and preferences of the applicant.

Things to Consider Before Applying for any Loan

There are issues to consider before applying for any kind of loans product. The rates offered, for example, may be an issue. Generally, lenders will not give the attractive rates that they advertise to all applicants. These are often held for those with impeccable credit scores.

Those with bad credit issues may, therefore, suffer here. They may, in some cases, not be approved for unsecured lending at all and may have no option but to use secured finance (if they own their own home) or specialist bad credit loans which usually come with much higher interest rates. Trying to clean up a credit history may help improve things.

It is also important to check whether rates advertised are fixed or variable. Fixed rates will stay the same for the life of the loan. Variable rates may increase or decrease over time. If the consumer opts for variable rates they should do so in the knowledge that they can cope with any increases if they do happen.

Those looking to repay existing debts may find that one of these products can help. They may, however, want to check out all their options first to make sure they pick the right one. Impartial debt management advice may also be useful.

How to Get a Payday Loan – Three Basic Requirements

Borrowing cash is easy if you know how to get a payday loan. Three basic requirements must be met and most people who apply will be accepted the first time they apply. To get a payday loan requires just a few qualifications.

  1. Income – you must have some type of regular, verifiable income. This can be from a job, government income, or self employment. Most lenders want to see a paystub or some other verification statement of regular income.
  2. Bank Account – most lenders require a bank account that will accept direct deposits. This is because the loans are backed up only by a check or automatic deposit permission form. They are unsecured loans, meaning there is no need to put up tangible collateral to get a payday loan. If the borrower does not repay their loan on time, the lender will process the check or ACH withdrawal. At that point the transaction becomes a checking issue rather than an unsecured loan. Any bounced checks will result in bank fees, bounced check fees and collection efforts.
  3. Personal Identification – a driver’s license is preferred, or other government issued identification.

These are the three basic requirements for getting a payday loan. Go to a local neighborhood cash advance store or an online payday loan website to get one of these loans. If you are at a store location, you will walk out with cash in hand. Online websites operate electronically. Your loan and repayment will be done automatically but not instantly. It may take minutes to a day to get a loan deposited. Repayments are done on the due date. To repay at a store location, simply go in and give them cash and pick up your uncashed check.

Other requirements may include providing several personal references. Your personal phone and address is also required by all lenders. Payday loans are convenient and can be used for any purpose. Most persons use them for emergency cash needs. Interest rates are very high but the loan term is very short. On a $100 loan, a normal fee runs about $15 to $25 dollars for a one to four weeks term. Loan limits and due dates are determined by a person’s income level and frequency of pay dates.

Getting a payday loan no credit check is easy as long as a person meets the three basic requirements. Many of people use payday loans every day around the globe. There are a few government restrictions that may apply; check with your lender regarding any limitations. Know how to get a payday loan. Three basic requirements are simple and being prepared to meet them makes getting your payday loan easier.

One important word of caution regarding payday loans. Although they are very easy for almost anyone to obtain, it must be emphasized that these types of short term loans do not fall under government regulations with regard to interest rates. These companies can charge whatever they wish, and most begin at an annual APR rate equal to just under 400%. This can be $15 to $25 per $100 every loan period, and it can trap a borrower quickly. Like anything else, buyer beware. Use these only in an emergency, and pay off immediately without reborrowing. If your income is short, find more income and do not get trapped in recycling payday loans.

Online Auto Title Loan to Get Money Quick: Use Car Title Loan Companies for Fast Cash Today

When life’s little emergencies pop up, they can cost a pretty penny. And if cash is short, then it can be certainly tough to come up with those pennies. If other options such as savings accounts, borrowing money from friends or low APR personal loans have been exhausted, then one might need to turn to an online auto title loan to get cash quickly.

What is an Online Auto Title Loan?

An online auto title loan is a loan given from a lender to a borrower where the borrower uses the automobile as the collateral to secure the loan. Once the loan is paid back in full, including interest and fees, then the auto title is returned to the borrower and the transaction is complete.

Requirements for an Online Auto Title Loan

Because the auto is acting as a piece of security for the loan, the automobile must be paid in full. That is to say no other debtor can place a claim on that loan. Otherwise their claim would take priority over the auto title loan company.

Some companies will bend these rules if there is enough equity in the vehicle that they could sell it for a profit in the case of default. The profit would have to be great enough to pay off the first note and make a reasonable amount of money for the auto title loan company. An example would be a car valued at $50,000 with only a $5,000 loan against it.

Term of An Online Auto Title Loan

An online auto title loan is meant to be a short term loan. The term of these loans are usually between two weeks and a month. At the end of that period there is usually a clause which allows the loan to renew if the note is not paid back in full. However, after the note has been rolled over several times, there will come a point in the contract where the auto title loan company must receive their money or they will keep the car.

Interest on an Online Auto Title Loan

The interest rates on these loans are often quite high. They may advertise a rate of 25 percent, however that 25 percent is for the term of the loan, which is usually a couple of weeks to a month. At the end of that term when the loan renews, another 25 percent will be charged. As the loan continues to get rolled over, the interest accrues.

How to Compare Credit Cards and Find the Best Credit Card Deals

There’s no such thing as interest free credit cards; just credit cards that start

that way, usually for a very short time. By the same token, credit card balance transfers can be terrific, but be warned of the default interest rate in its tail. Indeed, the proverbial lunch is never free when it comes to credit cards, but there are ways to find the best credit card deals for individual circumstances. Credit card rates are only one thing to consider.

The best credit card deals for a consumer will vary with that person’s needs. The best credit card deals for one person may not be so for another, so it’s best to compare credit cards on a few common elements and with consideration of individual circumstances. Here are just a few such factors on which to compare credit cards.

Annual Percentage Rate of Credit Cards and Interest Free Day

The annual percentage rate (APR) of a credit card is an important factor to consider when searching for the best credit card deals. This is the rate at which interest on purchases and cash advances will be charged. But considering just the rate alone can be deceptive when trying to compare credit cards.

When comparing credit card APRs, consider the rates at which interest on cash advances are charged, as opposed to just interest charged on purchases. Commonly, interest charged on cash advances is significantly higher than that charged on purchases, so if cash advances are a necessity, consider the interest rate at which these will be charged.

When trying to compare credit cards and find the best credit card deals, also consider how interest is charged. Do the interest free days start at the time of each purchase or on an arbitrary date of the month? These two options can have a dramatic effect on the interest charges incurred.

Credit Card Balance Transfers

Interest free credit cards don’t exist. Only interest free credit cards, as an introductory offer. Credit card balance transfers offered with many cards are not always as attractive as they first appear. These offers, used as new customer enticements, allow the transfer of balances on one credit or store card to another. The balance is then held on that new card at a zero APR, usually for a period of 6 months or similar.

The trap with credit card balance transfers is that the APR on these credit cards can often revert to a much higher rate at the end of the introductory term. Check the default rates on any cards offering credit card balance transfers, because this will be the rate at which interest is incurred after the introductory period.

Annual Credit Card Fees

Annual credit card fees, as distinct from interest on cash advances and purchases, are another consideration when trying to compare credit cards. Annual credit card fees can be one of the biggest variants between credit cards, thus making them a significant consideration when trying to find the best credit card deals. Some common fees to assess include the following:

  • Annual membership fees
  • Annual rewards membership fees
  • Annual credit insurance fees (sometimes insurance will be mandatory)

As well as checking annual fees, also look at default interest fees, overdrawn fees and other incidental fees that may be charged if the credit card is not kept in order. These fees can vary dramatically between providers.

Credit Cards Reward Programs and Frequent Flyer Miles

Commonly, credit cards are associated with rewards programs or frequent flyer programs. This can be an attractive benefit of some credit cards and should be a crucial point of differentiation when trying to compare credit cards.

Credit card rewards program will never pay more than what is being made by the financier; it wouldn’t make business sense. So, when using credit card rewards programs as a point of comparison, keep in mind that it is only one of many factors to be considered.

Credit Card Fraud Protection

While not as glamorous as rewards programs, credit card rates and credit card balance transfers credit card fraud protection is something to compare credit cards on when deciding on the best deals. Credit card fraud is a prevalent risk to credit card holders in contemporary society, so any protection afforded by a financier is a benefit worth considering.

All credit cards are not the same. When trying to compare credit cards and find the best credit card deals, there a number of key factors to consider. What suits the needs of one consumer will not necessarily suit another, so careful comparison on card benefits such as those discussed here are a good starting point for finding the best credit card deals. Remember credit card rates, often touted as the only thing to consider, are just the start when comparing credit cards.