Advice given to personal loan borrowers

19 August 2008

Finance information website the Thrifty Scot has offered advice to people considering taking out a personal loan.

Secured loans are "straightforward" to agree, it said, if the borrower owns property that a loan can be secured against. While this option may be unappealing for those concerned about debt problems leading to repossession, the article explains the owner will only have to leave the property if payments are not made and the lender chooses to foreclose.

Loans of this kind are also typically spread over a long period, for example 25 years. Payment holidays are also offered by some lenders.

Unsecured loans can be easier and quicker to arrange and are available for consumers with no property, but often have higher interest rates.

For those with debts, taking an unsecured loan as a debt consolidation option may look good to lenders, the article said.

The website also offers money-saving and income-raising tips such as selling old CDs and taking advantage of free offers.

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