Suddenly you are met with an urgent financial need, which, if not fulfilled, will hamper your happiness badly. You have already made enough use of credit cards; further utilization of the plastic money will prove to be too expensive. Next viable option is a loan. But you have no collateral to offer. So, is this the end for you? Definitely not; there are unsecured personal loans─ the choice of more than a million in UK.
You may think that this method of raising cash has a cost like credit cards. Well, let us compare both the options and find out which one is better. It is a universally acknowledged fact that credit cards carry much higher interest rates than unsecured personal loans. These cards are good for short-time borrowing. If you fail to pay off the bill on time (which is very short in most of the cases), you have to pay exorbitant interest rates.
Many a time you may just be able to pay the interest only, the principal will remain intact in its place. This is something detrimental to the progress of your personal finance. Conversely, unsecured personal loans (though short-term borrowing option), allow you much longer repayment duration. You get the chance to pay off the loan in small monthly instalments. The interest rates will be much lower and (if you want) will be the same throughout the loan period.
With regard to repayment terms and conditions, unsecured personal loans are a cut above credit cards. In connection with hidden charges, this loan gets an edge over plastic money. Of course, one can say that credit cards give quick access to money. Well, there is no disputing this fact. Yet, it must be mentioned that unsecured personal loans also releases the cash rather quickly. The processing of this type of loan is much quicker than secured type of loan. So, the borrower gets the cash in hand within a short time-frame.
By: Aisha Cristal