Unsecured Loan - Smaller Risk Free Borrowing for Any Purpose

By: Andrew Baker

You may not be having a property against your name; still you are able to borrow money and that too without any risks involved in the deal. In other words you would be taking unsecured loan. Such a borrowed amount can be put to any purpose of your choice like home renovations, purchasing a car, planning a wedding party, going for debt consolidation or meeting expenses towards holiday tour.

None of your property is at stake as lenders approve unsecured loan without collateral. This clearly implies that tenants or non-homeowners are at ease in borrowing money though homeowners are also eligible. Those borrowers who have a good income and employment record are preferred for the loan approval. Credit history of the borrower also plays key role in making up the lender's mind.

The loan amount ranges smaller in the range of ?5000 to ?25000, determined on your ability to repay and credit history. Its repaying duration also is kept shorter in the range of 5 to 15 years. This implies that borrower can repay the loan early without carrying the burden for long.

But a little disadvantage is that Unsecured Loan carry higher rate of interest. This makes the borrowings costly. Borrowers with less than perfect credit rating may have to pay even higher interest.

Those with bad credit history because of multiple problems such as defaults, late payments, CCJs and IVAs or arrears are also being approved for the loan if the lender is satisfied with borrower's repaying ability. Interest rate however will be further higher.

It is crucial to search for a suitable lender with competitive rate of interest. Usually, online lenders have comparatively rates on unsecured loans as compared to banks and financial institutions. But first take rate quotes of these lenders and compare them to locate a deal for your circumstances.

Unsecured Loans
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