Need to Borrow Money?

If you need to borrow money, then you've come to the right place. Before you actually take out a loan, it's important that you know that you have many options at your disposal.

Secured loans

One category of loans are called secured loans. A secured loan is one where the borrower pledges an asset (such as a house or car) as collateral for the loan, meaning that the lender can claim that asset in case the borrower defaults on the loan.

Secured loans are popular because they are often one of the easier forms of loans to secure, as the lender has less risk. As a consequence, secured loans will usually offer lower interest rates and be easier to get.

Unsecured loans

The other category of loans are unsecured loans. These are loans that are not secured by any collateral. Loans that fall under this category include credit card debt, personal loans, bank overdrafts and many types of lines of credit.

Because the lender has more to lose in these types of transactions, the interest rates will typically be higher and approval is more contingent upon factors such as an individual's credit score and income.

Secured or unsecured?

Which type of loan is right for you? The right choice will often be dictated by the reason and the immediacy which you need to borrow. If you are looking to buy a house, then you'll of course be shopping for a mortgage. If you need money to buy a car, however, there are more choices than you might think. You can of course use the financing offered by the dealership, or get car financing from an outside financial institution. In both of these cases, you would be using the car as collateral in the loan. However, in certain cases, it can make sense to borrow money from your credit card, if it has an enticing introductary balance transfer offer, for instance. Be forewarned, though, that you should be especially careful in this instance, as your unsecured rates are far more prone to change.

All else being equal, of course, you would want the cheapest rate with the best terms. That is why shopping on the internet for your loan often makes the most sense, as you can most quickly compare the greatest number of options.