Loans - Don't Rush In

By David Collins

You know what it's like; you find something you've wanted for a while - such as a new car or a home improvement - but your current financial situation means you can't afford it at this point in time.

In this case you have one of two options: hold fast for now and accumulate some savings in order to afford said item, or you could borrow the money in order to make a quick purchase.

There are a variety of different types of loan available, offering varying levels of security, payment options and durations:

• Secured Loans - involves securing an asset against the policy - such as a car or property - as collateral.


• Unsecured loans - monetary loans with no collateral, which are usually sold through financial institutions under a range of different packages - such as personal loans and corporate bonds.


• Payday Loans - short-term loans that offer a safety net til payday (hence the name) but usually with a high rate of interest

Loans can be useful for affording essential purchases, but it can also be a risky business if you don't play your cards right. Here are a few handy hints to bear in mind before you commit to a loan deal:

• Consider your current situation and whether you are financially healthy. If you have a lot of financial commitments already, the addition of a loan to your portfolio could have implications in future.


• Draw up a financial plan - including monthly outgoings and your current spending situation - and make a list of financial milestones to stick to, cutting down on non-essentials and reducing your current spending levels in order to keep your finances healthy, thus increasing your chances of having a loan approved.


• It can be worth researching your credit record before committing to unsecured loan deals. As you are not securing the loan against a particular asset, these can be risky if you're unable to afford repayments.

By ensuring that you give yourself a thorough financial health check beforehand, and keep up with the repayments, you can make the most of your loan plan whilst also helping to keep your credit score in a healthy state.

If you're looking to take out a personal loans it's best to research first. Search online to find a wide range of deals on loans - including secured and unsecured loans - to find a package that suits you.