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An unsecured loan is one that is not using a home, car or other valuable asset
as collateral. This is the opposite of a secured loan, which is generally a
more popular kind of loan. A secured loan offers less risk to the lender and
so lenders often establish low interest rates and low down payments to borrowers
interested in secured loans. However, this type of a loan his its disadvantages;
- Appraisals of the home, land, car or other asset must be made by an appraiser
approved by the lender. This can take time and slow down the loan process.
· Prepayment penalties may be included in the fine print, so if you pay off
the loan early you may have to pay a hefty fee.
- If you do not make your payments as scheduled, you could lose your home,
car or other assets.
Are you about to make a major purchase? Do you want to fund your purchase with a personal loan? Using a personal loan to fund large purchases, especially cars and college tuition, can be save both money and time. Both secured and unsecured loans are available to help you make your purchase, consolidate debt or improve your home. If you need money quickly, an unsecured loan can often be the fastest option. Fill out our free short form to contact lenders about receiving your unsecured loan as quickly as possible.
Every loan has its benefits and drawbacks. Depending on your needs the disadvantages
of the secured loan my outweigh its advantages, in which case you may want to
look into an unsecured loans. There are many reasons to look into an unsecured
- An unsecured loan can be obtained even if you do not own a home, car or
other valuable asset. If you rent or live with your parents this may be the
only type of loan available to you.
- Your home, care, land, etc is not directly connected to the loan and cannot
be seized by lenders if you fail to pay unless they take legal action against
you. Open lines of communication between the borrower and the lender can keep
this from occurring even in cases of failed payment.
- An unsecured loan can be obtained quickly, and can be used for emergency
or immediate needs, where as a secured loan may not be closed quickly enough
for you to use in certain situations.
Unsecured loans can also be used to help you consolidate debt. Debt consolidation will help you repair bad credit and roll all of you bills into one monthly payment. A loan often has lower interest rates than credit cards and can allow you to pay off your debt with less stress and lower monthly payments. If you are in collections or fear you will be soon, debt consolidation can help you avoid further damaging your credit.