No loans are created equal. If you’re planning to borrow some money, you’ll want to decide first which type of loan is right to solve your problem. At Bidii Credit Kenya, we will help you get started by reviewing types of loans.
Unsecured Personal Loans
Personal loans can be used for a variety of reasons including:
- Paying for a wedding expense
- Consolidating debt
- Paying rent
Personal loans can be unsecured loans. This means, you will not put collateral like a home or car on the line in case you’re unable to pay back.
Benefits of Unsecured Personal Loans
- A personal loan may help you pay off the debt sooner.
- A personal has a lower interest rate. A lower interest rate could translate to big savings
- A personal loan is a good choice if you are planning to finance a major purchase. This could be a home improvement project, a medical bill or moving expenses.
Secured Personal Loan
- A secured personal loan requires collateral. This could be a car, home etc to “secure” the loan.
- Secured personal loans have a lower interest rate compared to unsecured personal loans. This is because a secured loan is less risky since there’s an asset to backup your loan
- This is similar to personal loans, but customized for business use. You are given a certain amount of money over a period of years. This is subject to affordability and a credit background check. It’s payable with interest. A business loan can either be secured or unsecured.
This is a loan aimed at specifically buying a car. Just like a secured loan, the money you borrow is secured against the vehicle you plan to purchase. Keep in mind, If you default on your repayment plan, the lender is allowed to seize the Car.
A bridging loan helps you ‘bridge the gap’ when you need to pay for something as you await for your funds to become available. Bridging loans are common amongst people who are buying a property, but are waiting for the sale of another property. Bridging loans are secured loans, Such loans require a high-value asset to get approved. This could be a property or land.
This type of loan is under an unsecured personal loan. It requires a third party to guarantee the repayments. This is in case the original applicant defaults the payment plan. These loans are ideal for anyone with poor or no credit history who may have been turned down by a lender.
These are short-term loans and they are typically due by your next payday. To repay the loan, the lender will typically require you to write a post-dated check. Alternatively, you could authorize the lender to automatically withdraw the amount you borrowed, plus any interest or fees, directly from your bank account.
Home Equity Loans
A home equity loan is a secured loan, and your home is used as collateral to borrow a needed amount of money. The amount you borrow is determined by the equity you have in your home. This is the difference between your home’s market value and how much you owe on your home. Usually, you’re not allowed to borrow more than 85% of the equity you have in your home.
Credit Card Cash Advances
Some credit cards may offer a cash advance. This is a short-term loan that you borrow against your card’s current balance.
Before borrowing money, set a budget. This will allow you to know what you can pay back on a monthly basis.
Bidii Credit offers several loans for different population categories. Unlike the loan types mentioned above, we have very flexible loans that you can enjoy, ranging from unsecured SME loans, Logbook loans, Rental income loans, mobile loans and input credit loans. If you are looking to get a loan, consider from one of our options at Bidii Credit Kenya and enjoy the flexibility we offer on our products