Unsecured Personal Loan
As the name would suggest, an unsecured loan is a type of personal loan that doesn’t need you to place any valuable as collateral against the loan. Basically, a personal loan is defined as a loan that helps you meet your individual personal needs, and they can be secured or unsecured. But why should you go for an unsecured loan if there is a secured loan in the market? The reason is very simple, with a secured loan, it will mean putting something of value in line, (in most cases lenders require you to put your house as security).
You can even put your car or whatever other valuable you could be having, as long as its market value at the time of applying for the loan is equivalent to the amount of money borrowed. The problem however comes in when you fail to pay back the loan on time i.e. delay with your monthly payments and stuff. You will be served with late fees which if you continue getting late with the monthly payments and eventually be unable to pay back the loan, the valuable placed as security will be seized by your lender. In other words, with a secured personal loan, you will be putting your property at a great risk.
Unsecured personal loans on the other hand are much safer when compared to their secured counterparts as you will not put anything in line. You can decide to take an unsecured personal loan because of several reasons, which include:-
- To consolidate your debt – perhaps you have several existing loans or bills that are proving to be unmanageable because of their different due dates and varying rates of interest and stuff. You can decide to take an unsecured personal loan so you can consolidate all of them under a single umbrella, hence make the debts easy to manage as you will only be accountable to a single creditor.
- Home improvement – You can also take an unsecured loan to renovate your home with a target to add value to it.
- Finance car purchase – people also take unsecured personal loans to buy their dream cars.
- Manage your credit – if you have a bad credit card debt that is growing by the minute, you can also take an unsecured personal loan to pay off the credit card debt.
The best thing about unsecured personal loans is that they are approved very quickly hence will therefore become accessible very quickly. This is because the approval process doesn’t take long as the process does not involve property value evaluation and stuff. One thing though that you should know is that because the loan is unsecured, it will attract a significantly high interest rate, to make up for the lack of collateral.
Quick personal loan
There are several ways to protect the personal loan will be quickly described in detail in this article. You can borrow from friends or relatives alone. Usually this is not a good idea, because it often creates friction between the two of you. If for any reason you cannot repay the loan on time, you become confused and begin to play “hide and seek with your friend or family member. Your friend or relative is angry that you are late and apparently did not know enough to even talk about. This ultimately damages your relationship. Especially if your friend ends hurdles you.
Shops mortgage loan money mortgage personal property. Take your stereo, television, jewellery or other item of value of a pawn shop. They give him the cost of credit. Typically the cost of credit is a way below the actual value of the property. If you agree, a pawn shop keeps your property and gives you the agreed amount of the loan. This interest is usually high. If you do not repay the sum of many pawnshops offer a minimum amount of payment. This is usually the payment of interest. Then re-loan amount + interest to you and give you another 30 days to repay. It becomes very expensive. If you default on the loan, there is usually a grace period in which you can still buy your property if you pay a general comment.
These companies accept post-dated checks as collateral against your loan. They charge very high interest rate, but they will give you a loan. The total loan amount, which can borrow based on how much you make. Credit is due date of your next salary. If you do not repay the loan, the company will send your postdated check to your bank to collect payments from your bank account. Not only do you pay high fees, but also the risk of additional charges of overdrawing your account. Often, these types of loans extended to 6 times in a row. You just pay and re-borrow when the time comes to pay. They are really desperate loans. It is a vicious should be avoided.
There is another type of loan, like a payday loan, only it is attached to the title for your vehicle. If you have a clear title can borrow against the value of it. Of course, if you do not pay, you loose your vehicle.
You can also ask for an advance against your paycheck. Some companies offer this to their employees for personal emergencies. Or you can check with your financial institution will offer some small personal loans. If you do not have a real emergency, and must receive immediate cash, it makes sense not to borrow money through any of these funds. They all carry risks and very expensive. It is best to delay purchases, you can afford.