Unsecured Loans - Popular Finance

By: Angelo Drew

There are two loans in the UK finance market: secured loans and unsecured loans. Recent days have witnessed a distinct rise in the number of secured loans being procured in the financial market. The reason could lie in the array of benefits associated with secured loans - big borrowable amount, a long repayment period etc.

However, this does not diminish the demand for unsecured loans, which still holds pride of place among common folk in the UK financial market. Unsecured loans are fundamentally short-term loans. In other words, they are ideal finance to take care of small monetary needs.

Generally, the amount one can borrow with unsecured loans ranges from ?500 to ?25,000. The repayment period is between one to ten years. The loan taker is at a distinct advantage here. He does not need to furnish any collateral in order to avail this loan. The onus falls on the lender, who has to take steps to counter any repayment default from the borrower's side. He invariably hikes up the interest rates, which is one drawback with an unsecured loan.

An unsecured loan can be deployed to meet many ends. It can fund a wedding, pay off educational fees, finance a vacation, fund a home improvement project etc.

Unsecured loans are much easier to locate these days. It was once exclusively procured from banks and other traditional financial institutions; however, the modern loan market is rife with private and online lenders. The last option is, arguably, the most preferred, as it gives the customer virtually limitless options, as well as expediency.

Before availing an unsecured loan, the borrower would do well to undertake a concentrated analysis and comparison of the loans available. This will aid him to segregate the genuine lenders from the rest, those whose well-advertised loans may come with hidden charges.

Though it is difficult to avail unsecured loans if one has a bad credit history, they are not impossible to come by. However, these loans do carry a very high rate of interest.

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