High Interest Loans: Costly Yet Helpful
Friday, March 11, 2011
High interest loans are the loans availed at a bit higher interest rate and prove to be generally beneficial to the people who find it difficult to get their loan application approved because some of their bad past financial experiences. For those who have suffered from bad credit history or have certain defaults of payment on their name can go for these loans as they become easily available. Also for those who don't have collateral or don't wish to risk their property can go for unsecured loans which also have a bit higher interest rate. At the first sight the interest rate might bother you but you have to choose it when you can't find a lender for you. In the due course you can improve your financial status using the money you get from this loan.
High Interest Loans: some facts and figures
Under these loans you can borrow anything around £500-£250,000 depending on various factors. The amount that can be borrowed depends on your credit rating, your ability to pay back, certainly on the lender, type of the loan (secured or unsecured) etc. Interest rate can be fixed or variable (APR). Typically high interest rate loans are available at 7.7%APR. However, the interest rate can vary from 5.0%APR to 19.9%APR. If you opt for variable interest rate then make sure that you get the best deal. You must go for the cheapest APR.
Then you need to be careful weather the interest rate has chances to go up or come down. Also you can bank upon the traditional lenders (Banks) in case you get a better deal. Check out all the extra payments included in your APR. Last but not the least; be careful on the repayment tenure. Repayments are the most important part of any loan and you have to make sure that you don't make any defaults in repayment. Find out all the possible parries you can get on repayments. You make overpayment if possible, can get some benefits like holiday repayment, underpayments etc. So, explore all the possibilities and then decide about the offer that suits you the most. In case of defaults you can be deprived of your property that you used as collateral while opting for a secured loan.
High Interest Loan: application process
The process of application is very simple. You need to put your application online and your application will be forwarded to various lenders. You have to just look at the best available offer for you can then cash upon that. High interest loan can be of both kinds: secured and unsecured. People with any kind of credit history can avail high interest loan.
To understand the importance of high interest loan you must not look at the interest rate of these loans. As these loans are basically meant for people with bad credit history or those who want to opt for an unsecured loan there are always some risk with the lender to get back the amount, they compensate for this risk by hiking the interest rate.
