Personal Loans

Borrowing Money

Every one at some point in their life need to borrow money either for a short period of time or for a considerably long one. If you are in financial constraints and cannot figure out a way to meet up to your immediate financial needs you may consider borrowing money for sources available to you. Who to approach for money will depend on the amount you will need. If you require a significant amount of money you may need to approach a bank while if your need is just a few hundred dollars a friend would be enough.

Although most of the borrowing are made from either banks or from friend and family a wide range of option of borrowing are there. Depending on your current status some source may be able to lend you money while others cannot.

If you have a job and need a considerable amount of money you may approach a bank to provide you with the finances. Banks can provide both secured and unsecured loans to customers based on criteria. Secured loans are loans provided by a bank keeping either mortgages or some other valuable as a collateral. Collateral need to be of a higher value than the loan and interest put together. One major draw back of this type of loan is that not everything that is of value can be used as collateral. Banks usually prefer valuables that they can easily auction out in the market and recover the loan amount with ease.

The non secured loans of banks or other financial institution is paid out considering your capability to repay the loan. There usually are provided as a multiple of your regular income. That is nonsecured loans are either double, triple or ten times your monthly income. In order to avails such loans you need to demonstrate a sound credit history, a fixed job providing you with regular income, and that your salary can cover the loan amount.

Loans provided by a bank are usually over a period of one to five years or more depending on the type of loan you are taking from them. If you need a more short period loan payday loan may be it. These are loans paid by a financial institute against your pay check. Financial institute offering payday loan usually have faster processing usually a few hours, but can give you a much less amount than a bank can, usually up to $1000 to $1500. This type of loan can be a great life saver and a good source of emergency fund. Another advantage of payday loan is that the interest rate is usually charged as one time fee instead of recurring like the banks. Loans are given against your paycheck and usually needs to be settled within 30 days from the date of issuing.

Some credit card companies offer cash advance facilities. This facility allows the card holder to withdraw up to a certain amount of the credit as cash from either the ATM or branch of the company whose credit card you are using. Although this may seem to be a lucrative loan process where you have the ability to pay back the money as credit card bill but the truth is the interest charged against cash advances is far higher than if you purchase using a credit card or bank interest against a regular loan.

Now that you know all the borrowing options financial institutes are offering you can make a more educated pick that will not only help you recover your current financial needs but also ensure that you pay less as interest to the lender.