A private loan is a personal loan that is given without collateral. Personal loans can be used for just about anything, for example;
Borrow for holidays, to carry out a renovation, pay more expensive debts, buy a car and much more.
- Private loans without collateral
- Bank loan with payment note
Private loans without collateral
- Private loans without collateral
- 10 tips for private loans
- Cheap private loans
- Refund time for private loans?
- Checklist for Private loans
Online lenders usually offer free applications and make offers online so you can compare many bank loan offers and choose the one that best suits your needs.
But why put lots of time on information that someone else has already collected?
Lenguada has collected popular private loans at the same place so that it is easy to make a comparison of loans . Here are the most popular loans and their terms so that you can quickly get an overview of the range.
With a personal loan without collateral, the borrower does not need to offer any collateral for the loan. This is the main reason why this type of blank loan is the most common loan for people who do not own their housing.
The interest rate is higher than a regular mortgage because of the higher risk for the lender. The lender will protect himself from this risk by taking out higher interest rates and demanding faster repayment.
The range in interest rates, terms and costs between the most expensive and cheapest loans is great and it is therefore important to compare all options to find the lender that offers the lowest interest rate and most favorable terms.
However, a private loan is still much cheaper than getting financing by using a credit card. Unsecured personal loans are not only easy to qualify for, but the loan application process usually goes very quickly. However, if you do not need a large amount of money, a quick loan online can be a simpler (but more expensive) choice.
10 tips for private loans
- Compare loans
As with all financial products, it is worthwhile comparing personal loans. The effective interest rate is the actual cost of a bank loan. It includes interest, all other fees and when payments are due.
Many banks in contact with their customers claim that they offer favorable prices to their current customers, but it is often possible to find cheaper loans elsewhere.
- Read the fine print
Before applying for a loan, first check out the fine print. Some of the seemingly best offers may have unfavorable contract terms. This applies in particular to the interest-free loans offered by retailers of capital goods. A late payment means in many cases that the loan is automatically converted into a regular loan with a high interest rate.
Since the payment newspapers are sent out late in the month, many Swedish consumers who each year receive their interest-free loans converted into more expensive credits, as they have been sloppy in reading the terms of the agreement.
- Early redemption fees
Although it may seem unlikely that you could pay back the loan in advance, it is always good to have that opportunity. Unfortunately, many creditors charge a high fee for early repayment of loans in order to compensate for missing earnings.
It is a good idea to check how high the cost of early redemption is even if you do not think you will use that opportunity.
If you think there is the slightest chance that you will want to settle your loan prematurely, it may be worth making sure that it can be done without fees.
- payment Protection
Some blank loans have insurances embedded in the loan. These are designed to cover the monthly payments if the client is affected by illness or becomes unemployed.
If you want a loan with a payment protection, you should make sure that it is included in the terms and conditions. Keep in mind that a loan with insurance often includes exemptions, so make sure you understand what is covered before signing the contract.
- Check your credit rating
Before applying for a private loan, it is important that you check your credit rating. Lenders are only obliged to disclose interest rates and expenses for an average customer.
With poor credit rating as a result of one or more payment remarks, you will receive an offer with significantly poorer terms than you originally expected.
- Consider other options
Before applying for a personal loan, consider other forms of credit. You may be able to find a credit card that is cheaper or a short zero percent interest on purchases paid within 60 days.
- Check out peer-to-peer
If you want to try an alternative to the bank, you can borrow from a peer-to-peer lender .
P2P websites are marketplaces for social lending that link borrowers and lenders together. You need to have a decent credit rating and no payment notes to be able to search.
- Borrow more
In general, the larger the loan, the lower the interest rate may be. Because of how some companies price their loans, there are times when you can actually save money by borrowing more than you intended.
- Do not apply for too many loans
When applying for a loan online, most applicants leave a “footprint” on the credit report that the lenders take before approving a loan. Having many inquiries registered makes you look desperate, which may indicate acute economic difficulties.
As a result, many lenders will see you as a credit risk, your loan application will then be less likely to be approved.
- Understand the risk of loans against collateral
Loans against collateral are cheaper than unsecured loans, but you risk losing your home if you fail to repay. An increase in the home loan by taking out a mortgage bond can be an alternative to an unsecured loan, but it is only offered to homeowners with equity in their property.
A home loan requires more work by the bank and therefore they charge an application fee. Do not make an application if you are not 100% sure that you will be able to pay the bills on time. Mortgage loans are less risky for lenders but more risky for borrowers.
Have you decided to borrow money and want to take a private bank loan ? There are a number of things to think about definitely and know how much money you want to borrow, what type of loan is the best and what repayment time you should choose. There are just as many uses for private loans as there are people who use them and most lenders lend money without questioning for what purpose the money is.
One of the first and most important aspects concerns unsecured loans . Unsecured loans, unlike collateralised loans (purchase of real estate or shares), are not linked to disposable assets. Instead, it is the borrower’s person and good names that stand as security.
Unlike in the past when the bank only gave loans to people who had a good reputation and were “known in the village” it is today a computer program that assesses how good your name is and how much the bank or any other lender is willing to stretch.
Cheap private loans
Unsecured private loans are easy to take, a credit report is enough, then you write under a paper and have the money in the account within a few days.
Since a loan that has no guarantees other than the borrower’s intention to do the right thing involves certain uncertainties, the cost, that is, the interest rate, is higher than for a bank loan with security.
If you own your own home, it is cheaper to borrow money with the property as collateral and it also makes no difference in practice because the home can be subject to sale even for unsecured loans if one cannot pay.
If you want to renovate or expand your house, the bank is often more than willing to lend money because the work raises the value of the house or the tenant-owned apartment and thereby reinforces the bank’s security in the borrower’s assets.
Refund time for private loans?
As a guideline, one can say that the repayment period of the loan should be about as long as the period one expects to benefit from the purchase or what the loan should be used for. For example, if you are thinking of buying a new car and expecting to have it for five years, it is reasonable to have a repayment period that corresponds to that.
It is not reasonable to own the car for five years but pay on the loan for ten years or more.
Be smart and borrow cheaply. Today you do not need to book meetings and go or call around to different banks. Online offers are the best deals because it is cheapest and most profitable to find their customers online. Lenguada has collected the best bids on our site.
Checklist for Private loans
No one is guaranteed to get a bank loan, but submitting a digital application form is a simple and quick process to see if it is easy to get a loan application approved .
The rapid technological development, as well as central banks around the world that are pushing new money to push down the cost of loans and stimulate investments, have given us record low interest rates.
In addition to the classic bank loans, many new lenders have also been added, which have created completely new niches in the credit market for private individuals such as SMS loans , micro loans and other flexible loan forms. There are several key areas that lenders look at when they receive a new application.
Although preliminary decisions are automatically made by financial software, it is still important to present as good and error-free information as possible in order for a loan application to pass the needle eye and be approved.
Here are five important points that should be considered so that an application for bank loan results in a suitable loan;
- What loan do you need?
Before you go to your bank (online or office) first look at what the different competitors are offering.
You need to be aware of what type of loan you are looking for, terms you can afford and which target is available with repayment time and monthly cost. If you are looking for a certain type of loan (car or boat loan) make sure to hear what the dealer can find a good offer for you.
There may also be offers that come with direct mail, but first check through the contract terms before you proceed with them.
- ask questions
When you find the loan offer that you are most interested in, contact the bank directly to find out in advance which requirements they set, thus avoiding that a credit report is taken completely unnecessarily.
You may need to book an appointment in person to discuss the loan by phone or visit the bank, but it will make the loan considerably easier for the loan to be approved. Banks have different requirements and these are usually not public. It is important to know what applies so that you are prepared.
- How good is your credit rating?
If you are looking for a loan, you should already be aware of your credit history and have an idea of your credit score. The bank should tell if your income is sufficient for the loan to be approved. Plan ahead and request a credit report on yourself before applying.
Review the information in the report and make sure any errors are corrected. Most lenders rely almost entirely on a credit report even though there are those who make individual assessments and do not take UC on borrowers. If there are errors, this leads to a lower credit rating, which affects the possibility of having the loan approved negatively. Think about your own conditions when planning for a loan.
Apply for a loan that is in line with your personal financial conditions so that you do not have problems with the repayments.
- Make a checklist
Based on what information the bank asks for, it is wise to make a checklist of what information is needed for the loan application.
For the newly employed, it may take some time to get the documents you need from the employer. Incomplete applications are the most common reason for refusing loan applications.
- Reasonable expectations
Having a hurry when applying for a loan is never a good idea. Loan officers follow a certain template to approve a loan and pay out money.
It can therefore be useful to find out how the process works so that you have a reasonable expectation of waiting time and outcome. While preliminary loan messages can be given on certain loans, all the details may not be clear so that the loan can be paid out until after several days. Such questions you can ask the person who handles your case.
The goal of getting a credit is that it is big enough for the purpose and that it does not cause any difficulties to pay back.
Unsecured loans can be used for anything and it is often not necessary to explain what the loan is for. On the other hand, it can make it essential to get approved if the idea is to collect expensive credits, make investments in the home or other activities that lead to an improved financial situation.
It is frustrating to get a rejection of an application, but it is always possible to return to the lender and get a justification for how they reasoned about the rejection. Keep in mind that it is negative to apply for credits that are refused. Too many loan applications can destroy creditworthiness and reduce the chance of obtaining a loan that would otherwise have been approved.