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Case Study – BCRS Business Loans

personal loans

Understanding the different types of personal loans
There are 3 major types of personal loans you can get. All of them come with their own set of advantages and disadvantages so you want to think through your options carefully. No matter where you choose to get your personal loans from, you should have a plan for how you will use the money – and how you will pay it back. It can be easy to get overwhelmed by personal need and not think through the aftermath of a loan carefully. Take a deep breath and consider what makes all of these loan types a good choice, or a risky one.

Here’s what the client had to say:

Personal loans from family and friends
In a pinch you can always turn to your friends and family for small personal loans. This can be one of the fastest and most convenient ways to get a loan, but it also comes with a greater risk than getting a loan from a commercial entity. At the core of a loan from friends and family is the relationship you have with them. Very few personal relationships can survive the strain of giving and receiving a personal loan. It may be a better idea to ask for someone to cosign for your personal loans from another institution that will provide the monies. This also threatens your relationship, but at least money isn’t leaving someone’s hands directly so it is easier to handle.
Personal loans from a bank
Traditional personal loans from a bank can be tedious and time-consuming to get, if you can get approved for them at all. Banks look at everything from assets to credit history to determine your suitability as a risk. If you don’t have a lot, you may not get anything from a bank. The advantage of a bank loan is that they will lend more money if you are deemed a good credit risk. They can also spread the payments over several decades, such as with a mortgage for a home, so that you can afford big ticket purchases more easily.
Personal loans from a loan business
One of the more popular personal loans are those issued by loan businesses. These can be payday loans, cash advances or fast cash loans. They are often easier to get approval for – although the amount will be less than what you would be able to get from a bank. While the amount is less, there is a greater approval rate for those with no or poor credit as well. The other advantages to these personal loans is you can borrow only what you need, and most banks won’t lend small sums; they also have a shorter repayment term so you aren’t carrying debt with you into your future.
Which is right for you?
Deciding which of the personal loans is right for you takes careful consideration. Don’t just rush and pick one because it promises to deliver. No matter how desperate your situation, think your choice through carefully. Weigh out the advantages and disadvantages so you can use personal loans to get ahead in life – not to create a whole new burden.

Personal loans a necessity or luxury?
A loan taken that has no defined usage, as it can be used for any purpose is called a personal loan. It is a form of unsecured loan, which means there is no need for any documents or proof to guarantee this loan. All financial institutions provide this loan as an ongoing process.
There are two kinds of personal loan; secured and unsecured. The primary factor is the credit score of the person, in case the credit score is low in that situation personal loan is granted in the form of secured loan, where the borrower has to give either house or car as collateral and guarantee purpose so that can be used if the person fails to pay back the amount.
Unsecured loan as mentioned earlier is again based on the credit score of the borrower; they do not need to submit any papers as history shows that they make timely payments.
Why people take personal loans?
Generally lenders ask borrowers for employment details, to see that they have a steady flow of income and they have the capacity to repay this loan. People take this loan as a last resort, but there are various reasons for it, when one decides to take this loan he has to keep in mind that the interest rate on this type of loan is way higher than the other loans.
Nowadays the life a person leads is quite demanding in terms of money, there is always more bills to pay than their disposable income can fulfill. With medical emergencies, auto loans, house renovations the list is endless. By the time one finishes these payments, essential bills like electricity is neglected. If the electricity bills and other utility bills are neglected it becomes a reason of stress as the threat of disconnection comes into play. Hence, the person resorts to this loan.
During season time when companies offer good discounts on appliances and other household goods, families require to take this kind of loan as it is a golden opportunity for them to purchase these goods which otherwise is too expensive for them to buy. Spending power of most families is much lower than their demands today; hence they resort to this loan to make ends meet.
The most common use of this loan presently is to clear off short term loans, credit card bills. Since this loan offers much lower interest rate than credit cards it is an easy solution to clear off debts. Car purchase is yet another demand which is fulfilled by this kind of loan and is increasing popularity by the day. This is a far less complicated way of getting a loan sanctioned than to approach a car loan financing company.
Home renovations and improvements is another famous use for personal loans. It is a more easier and less tedious process than taking home improvement store credit cards or financing through some home improvement company.

Key Points to Consider
The key factors to consider while deciding to resort to such a loan; the credit score, collaterals is always a plus to have it makes the process simpler, the use of the money whether it is worth bearing a monthly repayment term. It is essential to understand one’s own affordability to bear such a loan, to compare rates of different sources before finalizing one, the read the terms and conditions to check for any hidden clause which can trap the borrower for a lifetime.
Remember to consider other sources like relatives and family friends if that would be a more flexible situation in terms of repayment, the importance of bearing the cost is the purchase really worth the burden, think about the state of the economy is it a favorable time to borrow money. Lastly the habit of the borrower should be introspected upon, if he is a spend thrift, if he has a good sense of spending money?
Personal loans is not an affair of the heart, it is the business of a shrewd business man. In today’s age there is a heated debate on whether it is a necessity or a luxury. Honestly it is a completely case to case scenario, generalizing is not a possibility in this game. When necessity demands careful thought process and analyzing will lead the borrower to the right answer whether he should take the loan or he can avoid it.