Friday, January 18, 2008

Know How can You Get a Loan

Loans are available to interested borrowers in various types and formats. Each loan is different from the other as most loans are structured keeping in mind the varying individual needs of people. Although formal lending process was initiated by the banks today and banks are not the only lending entity. There are many other lenders in the market that lend custom made loans for interested borrowers. Many people now turn to these lenders instead of going to banks because they have less stringent rules regarding loans and lending money to individual and who are not worthy enough to receive a loan. Although these companies charge more interest rates then most banks. They offer customized services along with relaxed environments that do not pressurize the borrower to make some sort of decision. In order to facilitate the borrowers and provide them with all sorts of loans banks and other lending institutions keep coming up with new products and services.

In order to cater to a broader category, loans are available all around the country and these countrywide loans are again adapted to suit the needs of locals. State owned banks have branches all over the state they operate in and even national banks make sure that through their branch network they reach each and every consumer and are in accessible whenever needed. Apart from expanding the branch network another step to make bank services more accessible these banks and other lenders have started online services for banking and loaning that are fast and convenient and can be accessed and operated from anywhere in the country. For instance a person sitting in any part of the country can access UK loans on the internet and get treated like a local of that area. Hence a loan UK is no longer for people living in UK only anyone can get facilitated by these loans if they want to.

Banks and other lenders deal in personal and business loans now. A commercial loan is usually bigger in amount then most personal loans however some exceptions still exist. Interest on a commercial loan is also higher then personal loans because the earning on investing the money taken as commercial loans is more. Commercial loans are available to all sized companies to help them revive their operations and also to small entrepreneurial startups. Small and medium enterprise loans are the new trend in commercial loans. On the other hand personal loans like car finance, house finance and credit cards etc have improved the living standards of many people. Those who used to dream of having a home of their own can easily afford one. These loans are usually secured by the item being financed itself. For example a house that is being financed by the bank will be the banks� property until you have paid in full and the bank can sell the house off to recover their money if you default on the loan. You can even get a loan to finance your studies, to go for a vacation to buy an RV or to buy a boat. Anything you name is now being financed by banks.

Another category of loans is small loans. Mostly these loans are in case of some emergency and the sum being loaned is very small. A typical small loan is from $100 to $1000 and the bank charges $10 to $30 on each $100 borrowed. These loans are also called payday loans and can be availed by any person who is caught in an emergency situation or caught between pay checks. Getting advance loans from employers was always a pain and most of them were never empathetic enough to lend you some money before payday when you needed it really badly. The pay loans by banks have solved this problem now and the best part is that they do not require you to give any security or elaborate financial details. Bigger loans like home loans and commercial loans take some days to get approved as these loans are secured by some valuable item and the lending institution has to verify the personal and financial information of the person to make sure they will pay the loan back in time and will not default on monthly payments. The best thing that helps banks and other lenders with this decision is the credit rating that is a reflection of your credit history and keeps going down whenever you default on any financial liability. On the other hand small loans are called as quick loans because they get approved in a matter of hours and the money is transferred in the account within 24 hours. A quick loan only requires you to provide some personal information along with a proof of a steady job. This information is verified within minutes to let you know whether or not you can get the loan. Instant loans do not ask for any financial information and hence the process is shortened.

The loans that are secured are usually charged with low interest rates and flexible pay back options as the lender is confident that they have something in their hand that will help them recover the money they are lending. The loans with low interest rates can be called low loans or the cheap loans. Secured loans for people with a good credit rating are by far the best loan as the lender is most secure in these loans and charges the minimum interest to the borrower. Interest loans can become a nightmare for people with bad credit rating as banks do not lend to such people due to the risk of default involved. Getting a loan from other lenders is also a pain because they charge extremely high interest rates to lend the money and also monitor the spending of the money. It is always better to search for the best loan before you decide to take one. There is always a chance of finding a better low interest from other borrowers. Also be aware of your credit rating and what rates you can get with this rating so that no one can take undue advantage of your lack of knowledge. There are several consultancy firms who will guide you to repair your credit rating and availing their services will always help to get in a better position credit rating wise and then get your loans consolidated.


Sarah Q. said...

Interesting post. I want to run a business soon, so I'll keep this post in mind. Becoming, what I hope, an entrepreneur is somewhat new to me, so I can use all the help and advice I can get! I know it'll be tough. Lately I've been thinking about the idea of buying a business instead of starting from scratch. I'm not sure what I should go for. Franchise? Home-based? I don't know. Do you have any suggestions or advice? Thanks!

Eliza Silva said...

@Sarah - Never give up, but don't keep at it if your heart isn't it. That's my advice. It's definitely hard right now, but with enough determination you can still be accomplished. Also, don't forget due diligence! That being said, if you're looking to buy a business, then it's best to know what's even available in your area. There's this site called, which is this online global marketplace where you can buy or sell a business. If you want, you can even invest in a business. I also suggest checking out any small business groups in your area. They should also know the ins and outs of conducting business where you live, or plan on doing business. Good luck!

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