| In any consumer product, young people form the | | | | people, unsecured loan forms the majority. Infact, |
| majority of buyers. Therefore, to get a pie of such | | | | young people have the highest level of unsecured debt |
| large market, these manufacturers manufacture | | | | in the UK, with the average person under 30 owing |
| products which are suitable for such large group of | | | | nearly £8,000, recent figures have revealed. |
| young people. At time, they include only those features | | | | Purpose of Loan for Young People |
| which will attract such young people. The basic idea of | | | | Loan for young people can be used for any purpose |
| all these products and features is to target the young | | | | depending upon the choice of the borrower. It can be |
| people. These young people form such large portion of | | | | used for buying a new bike or a racing car, to pay |
| buyers because they spend the most; their average | | | | tuition fee, to buy a home, virtually anything. Some of |
| spending is much higher than older people. For | | | | the common purposes for which people opt for loans |
| example, a young people will think at least once to buy | | | | for young people are: |
| an expensive racing car but an older person may not | | | | 1 Debt Consolidation |
| think. | | | | 2 New Car, Motorbike |
| There is common psychology of this young buyers | | | | 3 Exotic Holiday |
| market is that they spend more than their earning. So, | | | | 4 Cosmetic Surgery |
| quite naturally, such young people are always in need. | | | | 5 Professional development courses |
| This need being an opportunity for lenders, they have | | | | 6 Establishing office at home |
| devised loan schemes targeted at this huge market of | | | | Eligibility, Amount and Cost of Loan for Young People |
| young people, which is called loans for young people. | | | | Anybody aged between 18years and 30 years are |
| The basic difference between a normal loan and a | | | | eligible to apply for loans for young people. At time, |
| loan for young people is that the terms and conditions | | | | age limit does vary from lender to lender. The amount |
| of loans for young people are easier and flexible | | | | of loan also varies from borrower to borrower, in |
| compared to terms and conditions of normal loans. | | | | which different factors are examined. Such as age, |
| Like any other loan, lenders offer two types of loans | | | | educational qualification, full time employment, income |
| to young people-secured and unsecured. In case of | | | | level, consistency in employment etc. Similarly, rate of |
| secured loan for young people, the borrower has to | | | | interest to be charged by the lender varies from |
| offer an asset as security against the loan he | | | | borrower to borrower. However, since in most of the |
| borrows. This security is called collateral. Whereas, in | | | | cases this loan is unsecured which increases risk for |
| case of unsecured loans, no collateral is required. It is | | | | lender. So they charge a little higher interest rate to |
| given on the basis of borrower's profile. However, in | | | | compensate against the increased risk. People aged |
| case of young people, often such people start their | | | | between 18 and 29 owe about £7,718 each |
| career when they borrow money. At this juncture | | | | through credit cards, overdrafts and loans, the |
| such young borrowers have usually no asset to offer | | | | equivalent of 36% of their total household income, |
| as collateral. Therefore, in loan market for young | | | | according to Alliance & Leicester. |