Many people prefer personal loans only because of the flexibility that such loans offer to them. No other single loan has the capacity to serve as many people as personal loan UK can. The figures show that the personal loan UK market was worth £83 million in 2006, and it is expected to grow further by 19 per cent by the year 2011. This market forecast shows that there is a lot of support for personal loans in the UK financial market.
Lenders have different loan plans for different categories of borrowers. Basically, personal loans can be divided into two categories - secured personal loans and unsecured personal loans. While homeowners can apply for both secured and unsecured personal loans, tenants can only rely on unsecured personal loans. Putting it simply, secured personal loans are loans that require your home as security against the loan amount. On the other hand, unsecured personal loans do not have any such requirement - you can get them without any security.
Different categories of people in UK seeking personal loans include:
Borrowers with bad credit history
Borrowers with clean credit record
Self-employed professionals
Salaried class borrowers
Homeowners
Tenants
Borrowers having bad credit record can also get personal loans. These loans are known as bad credit personal loans, and they involve relatively higher rate of interest when compared to regular personal loans. Lenders give personal loans on the basis of the income of the borrowers. The higher income means that you can get bigger loan amount.
Self-employed professionals are required to show their previous income tax returns so that their income could be ascertained. Salaried class persons have to submit their salary slips. The interest rate in case of personal loans depends on various factors, such as the amount of money you borrow, the duration of loan term and your personal details that include your credit history.
By: Anaya Erika