Home » Finance » Loans

The Best Loans - What Are They?

Aug 17, 2007
The definition of the best loans is different depending on who you ask. For lenders the best loans are secured loans, of any type, and high interest loans. For borrowers the best loans are unsecured loans with low interest rates.

So, how can a median be found that makes a loan the best loan for both lenders and borrowers? The answer is in the details of the loan and how affordable and how comfortable the loan details are for the borrower.

Lenders prefer secured loans because they offer a safeguard. The borrower puts up collateral for the loan and should they default on the loan the lender then seizes ownership of the collateral and can sell it to recoup the loan amount still owed. With secured loans the borrower also assumes risk, so it is more likely that the borrower will not default.

They also want to be able to charge as high of interest rates as possible. Interest rates are how lenders make their money. The interest the charge is 100% profit for them. So, of course they want to charge as much interest as possible.

Borrowers prefer unsecured loans because they do not have to assume risk by putting up collateral. They also prefer lower interest rates. Interest rates tack on a large amount of additionally expense onto the money borrowed. The lower the interest rate the less the loan costs the borrower.

With the recent spare hike in interest rates a secured loan might not be the best option at the moment. If the interest rates continue to increase then homeowners might be pushed to afford their repayments, not to mention if house prices fall.

It is difficult as a secured loan will generally have a lower interest rate, be more flexible, allow you to spread the repayments out over a longer period of time and you will also be able to borrow more. So the best loan is dependant on your requirements and circumstances.

The details of interest rate sand collateral or no collateral are important and should be considered. These details can be adjusted until both the borrower and lender are satisfied. They can mean the difference between a good loan and the best loan for a borrower.

The best loans for both borrowers and lenders are loans that the borrower can afford. The bottom line is that if a borrower can afford a loan then details do not matter. The borrower can afford to make the payments, so they make them and end up paying off the loan as stated in the contract.

So, the best loans are not that easily defined. In some situations the best loan may be a secured loan with a low interest rate, while in other situations the best loan may be an unsecured loan with a slightly higher interest rate. It all comes down to a few factors.

The borrower should be able to afford the loan, they should feel as if they are not risking too much and they should feel comfortable with the loan. The lender really has the most control over a loan situation, so every loan is the best loan for them. It is really the borrower who has to be careful when defining their best loans.
About the Author
James Copper writes on all areas of finance and investment. He works for Any Loans who help borrowers find the best loans available to them.
Rating:
Please Rate:
(Average: Not rated)
Views: 186
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources