Don J has decided to move his growing family in the two-bedroom apartment they've occupied during the last couple of years into a three-bedroom home. However, he isn't yet prepared to purchase a home outright so he begins considering the "rent-to-buy" situation. Don then decides that in order for this plan to operate, he can use extra money to supplement the family income whilst in the initial period.
Through the years, Susan M has acquired a lot of debt for various purchases (home renovations, new car, furthering her education) and now she makes numerous separate payments each month. It occurs to her when she could consolidate these payments into one, it would be considerably easier for her to handle her finances.
Fred G's wife recently underwent emergency surgery for any serious medical condition. Fortunately the surgery went well but Fred now has to determine how they will pay the enormous medical bill that's now a part of their current expenses.
Above are three scenarios by which thought on a personal loan may be the appropriate move to make. Currently, loans of all types exist that could function as the response to many dilemmas, as long as the borrower keeps in mind that provisions must be made to repay these financing options. Once this fact is fully understood, Loan Calculator Australia can show how a personal loan may be the response to acquiring the financial freedom and flexibility to accomplish one's goals or resolve one's problems.
For all unsecured loans, there are standard terms which are decided upon by the lender and agreed to by the borrower concerning the loan chosen:
Secured or Unsecured Loan
A secured personal bank loan attaches a particular asset from the borrower's as collateral that will be claimed through the lender in case of loan default. A secured loan cost less than a personal unsecured loan because the lender has much more of a guarantee of receiving something for that loan in the event it isn't repaid. With an unsecured loan, the lender remains with nothing when the customer does not repay; therefore, the lending company charges higher fees and interest rates with this type of mortgage.
Fixed or Variable Rate Loans
Variable, or adjustable, rate loans are loans with interest rates that fluctuate periodically according to overall financial marketing factors, resulting in varying payments throughout the loan period for the customer. When marketing factors dictate lower interest rates, lower payments for that borrower would be the result. Conversely, a negative impact could result once the interest rates begin to climb, increasing the payments due. An additional advantage of a variable rate loan is early repayment is allowed without prepayment penalties.
A set rate loan locks in a designated payment amount which amount paid through the customer continues to be same for that lifetime of the loan no matter what changes occur with the overall interest rate. This allows for easier budget planning, however it restricts the client from paying down the loan early without being subject to prepayment penalties.
The lender does its credit report checks and income verifications just before offering the loan which will help these to decide whether to pre-approve a loan for several customers. While receiving a pre-approved loan offers are a sign the lender is considering the borrower's eligibility for a financial loan, it does not guarantee that the borrowed funds will be approved. The lender is going to do a thorough check up on the borrower's credit history before authorizing financing.
Debt Consolidation Loans Debt consolidation loans can simplify life by granting one loan to pay off multiple loans, leaving a person with a single loan to repay.