Debt consolidating secured personal loan
Though banks still make open-ended loans to their best customers, the review process can be difficult and the terms might discourage all but the most determined customers.
Today’s borrowers often turn to family members, friends and peer-to-peer lenders for personal borrowing.
Homegrown savings and loans lent money to buy boats and barbeque pits based on the reputation of their customers.
If you had a job, paid your bills on time and were known to be honest, there was loan money available. In today’s mass society, giant national and regional banks rule and loan underwriting is anything but personal.
Most personal loans lack collateral – property that can be taken if the borrower defaults – so they rely on the integrity of the borrower to repay the loan’s principal and interest.
In many cases, lenders do background and credit checks on potential borrowers to assess their risk. This kind of loan is used for everything from funding an education or financing a new business venture to purchasing luxury items or taking a lavish vacation.
It used to be nearly impossible to get a personal loan with a limited or poor credit history, but today there are loan options for people with bad credit and those without a detailed financial track record.Debt consolidation loans aren't right for everyone.It's important to check all of the other options available and make sure you're making the right choice.Some consolidation loans require you to secure the debt against your home.However if you fall behind with these types of debts or can’t afford to repay them you will be at risk of house repossession.Unsecured loans are made without collateral, so lenders consider them risky.Credit card debt is unsecured, since the lender has nothing to seize if the borrower defaults.One benefit of a personal loan is in the name: It’s personal.You can use it for any reason you like and you often don’t need collateral to get one.A secured loan uses an asset, usually a house or car, as collateral.If the borrower defaults on the loan, the creditor can take the asset.