What is an Unsecured Loan?
An unsecured loan is a loan obtained without collateral. A person obtaining an unsecured loan agrees to pay back the loan within a set term and signs documents attesting to such. This type of loan can also be called a signature loan. The simplest unsecured loan is a personal loan from a friend or family member, with an I.O.U. as signature of agreement to pay back the loan. This type of unsecured loan should be well considered whether one is the lender or borrower. Large amounts that remain unpaid can be detrimental to relationships with family or friends. Either the lender or borrower may be dissatisfied with the rate at which the loan is being paid, and there is little recourse but small claims court if the loan remains unpaid. Another common type of unsecured loan is a purchase made on a credit card. Each time a person makes a credit card purchase, he or she signs a form which authorizes the payment and stands as an agreement to pay the money borrowed. When the person has obtained th
An unsecured loan is a loan in which you do not have to secure any personal assets to the debt. A secured loan usually means that you would secure your home to the loan, meaning that if for some reason you were unable to pay back your loan, the lender can reposes your house. As there is nothing to guarantee that the lender will get their money back, successful unsecured loan applications heavily depend on the person’s credit rating. Your credit score will determine how much you are able to borrow and the duration of the loan. The maximum you can borrow with an unsecured loan is 25,000, and the minimum is usually 1000. The loan can be repaid within 6 months or 10 years. Both of these factors will be taken into consideration upon application, and will both be dependant on how good your credit rating is. When an agreement has been made, you will then be asked to set up a direct debit, and the repayments will be made monthly. All loan providers charge APR (Annual Percentage Rate) on the mo
: John Mussi An unsecured loan is a personal loan where the lender has no claim on a homeowners property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments. The amount you are able to borrow can start from as little as 500 and go up to 25,000. Because you not securing the money you are borrowing, lenders tend to limit the value of unsecured loans to 25,000. The repayment period will range from anywhere between six months and ten years. Unsecured loans are offered by traditional financial institutions like building societies and banks but also recently by the larger supermarkets chains. An unsecured loan can be used for almost anything – a luxury holiday, a new car, a wedding, or home improvements. An unsecured loan is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation. There are a few things to consider before applying for an unsec
An unsecured loan is one that has no collateral, such as a house, to reassure the lender that their money will be returned. These finance agreements can help out people who have been credit blacklisted. If the borrower is honourable, it can work out well for all parties involved. The lender can see a return on their money, and the borrower can use the money to establish a business, or keep themselves out of financial hardship.
