Article Sphere Logo
 

Unsecured Lines Of Credit Instead Of Loans

By Expert Author: Melissa Kellett | Article Abstract
Word Count: 564 words | Views: 573 view(s)
Unsecured personal loans have become more and more common with the years and banks offer these loans to clients every single day for purchasing computers, furniture, going on vacations, etc. However, very few know that unsecured personal lines of credit are also available and that there are many advantages provided by this kind of loans.

What Unsecured Loans And Lines Of Credit Share

As opposed home equity loans and lines of credit, both unsecured loans and lines of credit do not carry collateral. Equity is the difference between the home value and the debts secured with the property. Basically, unless other specific circumstances, if you want to know the amount of equity available on a property you need to subtract the amount of the outstanding mortgage to the market value of the property. There is no need for appraisal provided that the purchase of the property was a recent one.

Since both loans and lines of credit are unsecured, the interest rate charged for them are rather high. The interest rate charged for lines of credit is slightly higher and always variable as opposed to unsecured loan rates that can be fixed. Nevertheless, the interest rate charged by either are significantly lower than the rates charged for credit cards, pay day loans, cash advance loans, etc.

Also, the loan amount you can request has no particular limit but is lower than that of home equity loans and lines of credit which equals the amount of equity available. However, most lenders have some restrictions on this matter and the amount of money you can request combined with the home mortgage cannot exceed 85% of the home value. Besides, though home equity lines of credit have an amount limit, there is not really a fixed amount you actually request. Thus, with an unsecured loan or line of credit you can get a fairly good amount too.

Line Of Credit Advantages

The main advantage lines of credit provide is flexibility. With a line of credit you get a revolving amount that only charges interests when you withdraw money from it. Other than that, only a small fee is charged every month to keep the money available whenever you need it.

If you need a certain amount, you don’t need to request it, you just withdraw it from your account or issue a check against your account and the money is always available. You can request as much money as you want and as many times as you need as long as you respect the amount limit that is fixed at the time of loan approval.

Once the money is withdrawn, you can keep using your account as long as you have credit left. Repayment is simple, at certain date you just need to repay the interests and you can also repay any capital that you want. The only minimum that you need to respect are the interests (just like some credit cards).

Once you repay certain portion of the capital, the amount is available for you again whenever you need to use it. When the loan is due, there are two options: Either you need to repay the whole amount or the line of credit is transformed into a loan with fixed monthly payments for a longer period of time. There is also the possibility of renewing the line of credit provided you get approved by the lender again.
Melissa Kellett

About the Author/Author Bio

Melissa Kellett is an expert loan consultant who has worked for twenty years in the financial industry and helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and many other types of loans and financial products. If you want to learn more about Personal Loans Debt Consolidation and Private Consolidation you can visit her site http://www.speedybadcreditloans.com/

Article Source: http://www.articlesphere.com/Article/Unsecured-Lines-Of-Credit-Instead-Of-Loans/181116

Article Submitted: 2009-03-09 | This Article has been viewed 573 times.

More "Credit" Related Articles

 
 

Listed below are more articles related to the above article from the "Credit" article category.

People interested in the above article "Unsecured Lines Of Credit Instead Of Loans" are also interested in the related articles listed below:

 
Many websites and adverts offer to wipe out bad credit reports, but what is the truth about such claims. If you have a bad credit history is it really possible to eliminate it? Find out how credit scoring works, whether you can change your score and what you can do to improve your situation.
Someone with bad credit usually finds many difficulties when trying to get additional credit. Credit score and history has become the main variable considered when approval is in question. Nevertheless, there are ways to get approved for a loan with bad credit and knowing how bad credit lending works can provide you with some hints as regards what you need to do to get approved.
The government gives away trillions of dollars on free grants on a yearly basis. This means that many US citizens have enjoyed the advantages of a government grant, and many will continue to do so. Government grants cover most of the lending fields in the market, you will be able to get finance for your education, your small growing business, expensive health care and even personal use.
This question is a common one among all the inquiries we process daily. At least half of the requests of aid we receive everyday have to do with bad credit problems. People seeking finance find it very hard to obtain financing with bad credit. Sometimes it is so hard that people think it is actually impossible to get finance with bad credit. Though it is possible to obtain finance with a tainted credit report, there are some facts that you should know...
Anyone can have credit problems. There are many unexpected circumstances that can lead someone to bad credit situations. The key is then to make something good out of it. Those who can benefit from negative experiences are more likely to succeed in life than those who just suffer them. In order to do this, you need to rid yourself from certain prejudices that most people who have bad credit are likely to have.
In the current economic downturn increasingly more families are experiencing troubles making ends meet. The worse off are extremely close to poverty and need urgently to find some help. A lot of these troubled households are not aware of all the sources of possible additional income available to them. One avenue that many people in financial trouble overlook is the Earned Income Tax Credit (EITC) which is overseen by the federal government.
Contrary to what most people believe, the foundation of a healthy financial life is not a good credit rating. Even if a good credit standing will save you lots of headaches and will give you the key to obtaining the finance you need, it does not ensure the wellbeing of your financial situation. And what does? Habit. Not everyone can claim they are well fit when it comes down to managing their finances. A healthy financial life implies not only managing your income wisely, but also being able to save and knowing how to do so.
 
Article Directory Home All Categories Finance Credit
 

Can't find what you're looking for? Try Google Search!
 
Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.

Afrikaans Albanian Arabic Belarusian Bulgarian Catalan Chinese (Simplified) Chinese (Traditional) Croatian Czech Danish German English Estonian Filipino Finnish French Galician Greek Hebrew Hindi Hungarian Icelandic Indonesian Irish Italiano Japanese Korean Latvian Lithuanian Macedonian Malay Maltese Dutch Norwegian Persian Polish Portuguese Romanian Russian Serbian Slovak Slovenian Spanish Swahili Swedish Thai Turkish Ukrainian Vietnamese Welsh Yiddish