You need money to take care of your financial obligations but are in a dilemma to choose a loan plan. You don’t know whether a secured loan or an unsecured loan will serve your purpose. The increased competition and persuasive advertising tactics of lenders have only increased confusion in your mind. So, if you are interested in understanding the basics of secured and unsecured loans and how to decide on the type of loan then read on. There are various factors which need to be taken into consideration while choosing a loan package. Some of them are the following:

• Loan Amount- The amount of money is an important parameter which can decide the kind of loan you need to take. If you need a big amount say about £ 50,000 then taking a secured loan will be a better choice as lenders are wary of giving such a big amount as an unsecured loan.
• Repayment Period- SECURED LOANSare a good bet for people who want a longer repayment period whereas if you want to clear the debt as soon as possible, then go for an unsecured loan. The repayment period for a secured loan can be as long as 30 years.
• Monthly Installments: A secured loan due to longer repayment periods and lower interest rates makes your monthly instalment smaller in comparison to unsecured loans.
• security- Your capability or wish to provide security is also an important consideration while availing a loan. A secured loan needs security whereas an unsecured loan doesn’t need one. So if you don’t want to put your house at risk go for an UNSECURED LOAN.
• Credit Record- If you have a bad credit history because of defaults in the past, then applying for a secured loan will increase your chances of loan approval.

Every loan has its pros and cons and a good loan is one which serves your purpose and solves your problem. So have a good look at the above points, compare your needs with the above factors and then decide on the type of loan you want to avail.

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