Get The Right Loan On The Right Terms

Online, September 11, 2011 (Newswire.com) - Loans that are unsecured, or not backed by collateral, are often referred to as personal loans or signature loans. These loans can be based solely on the applicant's credit rating, and can be very difficult to obtain.

There are basically three types of unsecured loans. First, there's the personal unsecured loan, which the borrower is responsible for. Then there's the unsecured business loan, which means the business is responsible for repayment. And last, there's the unsecured business loan with a personal guarantee, which means the individual will repay the loan if the business defaults on it.

When you are looking for the right unsecured personal loan for you, be sure you look beyond the interest rates. You should also be careful to read the fine print of the documents you're asked to sign. Make sure you understand the fine print and that you ask lots of questions. If you don't get the answers you need or if the lender is hesitant about answering your questions, then move on. Find another lender to deal with.

You should also look for terms such as prepayment penalties, APR adjustments and loan insurance. Prepayment penalties are the fees the lender will charge you if you pay off the loan before the agreed-upon term. The lender counts on the interest you would pay, and if you pay the loan off early, the fee compensates the lender for the loss.

Annual percentage rate, or APR, is commonly covered in the fine print. If your credit is less than perfect, you can expect a higher APR. Lenders are required by law to disclose the APR before you sign for the loan.

Loan insurance isn't very common on unsecured personal loans, but it does happen. Some lenders may require insurance to cover your payments in case you can't repay the loan for some reason. Your premium payment will be tacked on to your loan payment. Be sure you read to find out if this is required, so you don't get a nasty surprise later.

When you're shopping around for the right loan for you, ask lenders to give you a copy of their contract. That way, you can review it ahead of time, and ask all the questions you need or want to.

By doing your homework and checking lenders out thoroughly, you'll find it's much easier to get the right loan on the right terms.