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Young & Employed: Go for Loans
for Young People.
In any consumer product, young people form the majority
of buyers. Therefore, to get a pie of such large market,
these manufacturers manufacture products which are suitable
for such large group of young people. At time, they
include only those features which will attract such
young people. The basic idea of all these products and
features is to target the young people. These young
people form such large portion of buyers because they
spend the most; their average spending is much higher
than older people. For example, a young people will
think at least once to buy an expensive racing car but
an older person may not think.
There is common psychology
of this young buyers market is that they spend more
than their earning. So, quite naturally, such young
people are always in need. This need being an opportunity
for lenders, they have devised loan schemes targeted
at this huge market of young people, which is called
loans for young people. The basic difference between
a normal loan and a loan for young people is that the
terms and conditions of loans for young people are easier
and flexible compared to terms and conditions of normal
loans.
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Like
any other loan, lenders offer two types of loans to
young people-secured and unsecured. In case of secured
loan for young people, the borrower has to offer an
asset as security against the loan he borrows. This
security is called collateral. Whereas, in case of unsecured
loans, no collateral is required. It is given on the
basis of borrower’s profile. However, in case
of young people, often such people start their career
when they borrow money. At this juncture such young
borrowers have usually no asset to offer as collateral.
Therefore, in loan market for young people, unsecured
loan forms the majority. Infact, young people have the
highest level of unsecured debt in the UK, with the
average person under 30 owing nearly £8,000, recent
figures have revealed.
Purpose of Loan for Young People
Loan for young people can be used for any purpose depending
upon the choice of the borrower. It can be used for
buying a new bike or a racing car, to pay tuition fee,
to buy a home, virtually anything. Some of the common
purposes for which people opt for loans for young people
are:
- Debt Consolidation
- New Car, Motorbike
- Exotic Holiday
- Cosmetic Surgery
- Professional development courses
- Establishing office at home
Eligibility, Amount and Cost of Loan for Young
People
Anybody aged between 18years and 30 years are eligible
to apply for loans for young people. At time, age limit
does vary from lender to lender. The amount of loan
also varies from borrower to borrower, in which different
factors are examined. Such as age, educational qualification,
full time employment, income level, consistency in employment
etc. Similarly, rate of interest to be charged by the
lender varies from borrower to borrower. However, since
in most of the cases this loan is unsecured which increases
risk for lender. So they charge a little higher interest
rate to compensate against the increased risk. People
aged between 18 and 29 owe about £7,718 each through
credit cards, overdrafts and loans, the equivalent of
36% of their total household income, according to Alliance
& Leicester. Key features of loan for young people
are:
- Loan amount depends upon the profile of the borrower
- Interest rate also depends upon the profile of
the borrower and risk involved
- Various factors which are considered before offering
loan are:
- Age
- Full time employment
- Income level
- Consistency in employment
- Type of organization where working
- Any asset
- Any previous record of payment
Therefore, if you are young and employed person and
if you are in need of money, you can straight away opt
for loans for young people. This is a category of loan
specially designed for young people.
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