Which Is The Better From Unsecured Personal Loans & Car Loans According To Lenders?

By Author: Amber Sayon
Total Articles: 2
Comment this article

Why are car loans more readily accommodated by banks than personal loans? The answer is loan security. While the bank is always looking for someone to lend money to (and believe me, banks are not making any money from your savings deposits), they would prefer to lend it to someone who has the actual capacity to pay for the loan. This is also the reason why banks tend to lend money to people who do not need it, rather than to those who are dependent on the loan just to survive.
Still, using a car to secure a loan is still more preferable than using nothing as collateral, like in a unsecured personal loan. The latter is also known as a character loan, wherein the bank qualifies you based on your previous dealings with other lenders. That is why they ask you for your credit card bills and bank statements to make sure that:
1. You are a reliable payer and
2. That you have the capacity to pay for the requested amount.
The common misconception is that banks are really after the borrower’s personal property, and that they are hoping that the borrower does not pay for the loan, so that they can confiscate ...
... the mortgaged property used to secure the loan. There is no more truth to this than you wanting to confiscate your friend’s iPhone after they miss a payment (especially if you have the newer version). Surely, you would rather have that friend pay than go about the hassles of confiscating the old phone and making your friend feel bad in the process. Not only is it hard to sell a second hand phone, it’s also hard to make sure that its value is still as good as when you formalized the deal, especially if that friend/borrower is still the one holding the phone (as in the case of a car loan).
If you think of your bank as a friend who is always ready to lend you some money whenever you need it (they even have friendlier interest rates than most of your friends), then you are looking at things in the proper perspective. If you value the bank’s friendship, then you have to stick to your end of the bargain so things do not turn sour for both of you in the end.
When in doubt about how you should deal with banks and other financial institutions, always remember this: They want to lend you the money, but they need to make sure that you are a good investment. Just how good of an investment that you are will be reflected in your dealings with the small stuff such as your credit cards.

Personal loans are loans provided without any security. You have to pause a bit before you hurry to take this magical loan. These loans are tricky and they are far more expensive than a loan given to its security. And also require that you have a good credit report and that you can prove that you have with your regular income. The interest rate is very high. If you work for a top notch corporate and have large provable income in double digit per annum, then these loans are likely to be more reasonably priced. These loans are provided by various banks.

These are provided by non banking financial companies also. It has various factors which affect your personal loan eligibility. There are some of the few factors which the bank will consider while they decide on your personal loan eligibility. The financial background is the most important parameters that determine if you are eligible for personal loan and also the quantum of personal loan you are eligible for. This will help the bank to understand how well you can pay back your loan. To be eligible for a personal loan, every bank has a minimum level of income. The credit history will help the bank to ascertain track record for payment of any loan. The chances of your getting the loan is higher in case you paid all credit card bills and on time. The personal loan eligibility may depend upon the company you are working for. Getting the secured personal loans may be difficult if you are working for a B class company for you and it maybe costlier also compared to a person who is working in an A class company. It means that if you are working for a company which belongs to the A class according to the bank, and then the personal loan rate would be comparatively lower to a person who belongs to a B class company. At the given point of time in case you are having any other loan, then the eligibility for personal loan may go down as you are already paying of the previous loan and the income in your hand would be lower.

Everything you need is just a click away in this internet age. The loan process has also become easier and more customer friendly. To such extent the consumerism has increased that it makes want things now rather than wait for months or even years to save enough money for buy things. These schemes are quite promising today, no doubt. But there is extra need for more careful. These are usually very expensive. It is important for us to explore deep into any loan offer and make the right choice. Once you received a loan, you have the best to pay it back as quickly as possible. Thanks for reading our expression and if you have more things to know visit our website for further queries.