In lay parlance, an unsecured personal loan is personal loan having a fixed interest rate and requiring no collateral or security.
A financial crisis can come to anybody and at any time. In years passed, loan taking was more exception than norm. These days, the scenario is a lot different. There are a surfeit of lenders to choose from, each trying their their best to pull the customers. A homeowner can easily get a secured loan. However, for a tenant or a student, getting a secured loan is not possible.
In this situation, an unsecured personal loan becomes the best and perhaps the only viable option.
With the absence of a physical guarantee as security, a borrower's repayment ability is thoroughly checked by the loan officers. To counter the risk of loaning money to an unknown commodity, the lender expectedly charges a relatively higher rate of interest. The lack of collateral means that payback capacity of the customer is evaluated through:
- annual income,
- bank statements, and
- employment documents
Loan amounts vary between ₤5, 000 to ₤25,000. Borrowers have a choice of either taking a monthly or a flexible repayment option. An is a multipurpose loan and it's the borrowers prerogative to use it any which way he wants. Borrowers with less than satisfactory credit records are also eligible for unsecured personal loans.
