There are various types of personal loans that Personal Money Network offers you. They are tailored to suit your financial situation and circumstances and keeps in mind your credit score and how much time you need to repay them. One important thing to note is that despite the type of personal loan you choose to obtain, you will become liable to fees, charges, and interest during the loan term, so decide carefully! The different types of personal loans that are available to you at Personal Money Network are:
Secured Loan
When obtaining a secured loan, you will be required to put an asset as security. This means that the lender can take possession of the asset that you put as collateral if you are unable to make the required repayment on time. Some examples of secured loans involve mortgage (loans secured by your house) and car loans (loans secured by your car title). However, if you want a small amount, you can even put your jewelry as collateral. A secured loan offers the lender security against defaulting and you enjoy lower interest rates as there is less risk for the lenders.
Unsecured Loan
An unsecured loan is the opposite of a secured loan as this financial loan is granted without a guarantee. As part of an unsecured loan, a lender provides money to a borrower without any legal claim on the borrower’s assets in the event of default. This means that the repayment to the lender depends solely on the financial capacity and creditworthiness of the borrower.
The lender typically offers this type of loan only to preferred clients with whom he has established relationships (the character, credit history and ability of the borrower are well known). The unsecured loan is more common among friends and family members who have a longstanding relationship. Since these loans are unsecured, interest rates are generally less favorable than for secured loans (loans for which lenders hold a claim on the borrower’s assets).
Fixed Interest Loan
A fixed interest rate is an interest rate on liability or debt, such as a mortgage or a loan, that remains the same (fixed) during all or part of the term of the debt. Fixed interest loans are the most common form of the loan program, where monthly capital and fixed interest payments never change during the life of your loan.
Fixed-rate loans are available in terms ranging from 10 to 30 years and will be reimbursed at any time without penalty. This fixed-rate mortgage is structured in such a way that it is probably fully settled at the end of the term of the loan. The fixed rates avoid or eliminate the risk of interest rates, that is, of the problems that could be had if the reference rates increase or decrease.
Variable Interest Loan
A variable rate is one in which payments for debt or liabilities vary, upwards or downwards, depending on the financial condition of the borrower. The interest rates are adjusted, from time to time, to borrower’s financial condition. If the rates go down, the variation is reflected in the monthly payments.
The starting rate is lower than for a fixed-rate loan and it is possible to repay your loan early without paying penalties, for example, if the rates increase by several points. It is generally possible to change its floating rate for a fixed-rate, provided that this clause is included in the initial loan agreement.
Debt-Consolidation Loan
Debt-consolidation is a loan granted by a financial institution for the purpose of consolidating several loans, such as consumer credit and credit cards. It consists of contracting only one loan instead of paying several debts. A debt consolidation loan will consolidate all your payments into an easy to manage loan.
By making monthly payments, you can repay your debt faster and at a lower interest rate. Whether you’re having trouble repaying your student loan or your credit card is no longer able to take another of your crazy spending, you could greatly benefit from consolidating your payments with a consolidation loan.
Personal Money Network offers competitive interest rates for a debt consolidation loan, which can help you save a lot of money on the interest payments you would otherwise pay on high-interest credit cards.
Line of Credit
A line of credit is the possibility offered by a bank to one of its customers to borrow funds at any time, within the limit of a ceiling fixed by contract and for a certain duration. This line of credit can be consumed in one or more times during its validity period. For individuals, this line of credit is similar to a revolving credit card.
A line of credit is the authorization given by a bank to an individual and allows him to have a permanent credit. This line of credit is repayable by maturity but is always open. Once reconstituted (through repayments), it can be used again without any specific request from the bank or financial institution.
Overdraft
An overdraft is a type of line of credit that happens when you do not have enough money in your account to cover a transaction and the bank pays anyway. You can overdraw your account using checks, ATM transactions (ATM / ATM), debit card purchases, automatic bill payments, and electronic or in-person withdrawals.
The bank overdraft mainly corresponds to the “overdraft authorized”, the amount and date of which are set contractually in the account agreement, which specifies whether an authorized overdraft is or is not possible. The overdraft is considered a credit and is therefore not free. In addition, the overdraft is not a right: it must be submitted to your bank for approval.
Payday Loans
These loans allow you to borrow between 30 and 50% of your salary and they are contracted from private companies that usually require proof that you have a regular income, a bank account, and a permanent address. The lender will have you sign a contract specifying the costs, the various fees, the interest rate, and the due date. Reimbursement is by post-dated check or pre-authorized debit (direct withdrawal from your bank account).