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Personal Loans Advantages And Disadvantages

Posted by: headm on: December 21, 2012

Nowadays, a large number of persons are turning to personal loans in order to meet their financial requirements, even persons having a dubious credit status.

Personal loans are said to be tailored for meeting the requirements of people. Suppose you are fascinated by a car or a house and want to own it, but your current financial status forbids you from making this purchase, you can always go for a personal loan and fulfill your dreams. Possessing a personal loan sometimes also acts as an assurance of money for emergency situations. People may have to face numerous situations in life where urgent money is required, personal loans act as lifesaver in such conditions. These loans are available to everyone, whether they have good or bad credit. However, persons with good credit rating have a better chance of getting their loans sanctioned than their bad credit counterparts. The ease and possibility of obtaining loans in the future increases with timely payment of installments, which results in timely return of the amount borrowed. In this way, goodwill can be earned among the lenders and future loans may be acquired at lower interest rates. Guaranteed personal loans also follow the same trait. People can select either of the two types of personal loans available in the market. One is secured and the other is unsecured personal loan. In secured personal loans, the borrower is required to provide his assets like car, house, land etc as collateral to the lending company against the loan. This is not required in case of unsecured loans.

However, in case of secured personal loans, if the borrower is unable to clear his debts in time he may have to surrender the asset declared as assurance against his loan. If a person with bad credit is unable to pay repay his loans on time, he should give up the hope of acquiring any future loan from anywhere.

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