Unsecured Loans - Meant Especially for Short-term Finance

By: Ashley P Lewis

Tenants or non-home owners do not own any valued property against their name. They can opt for Unsecured Loans for borrowing small finance for variety of purpose. These loans can be a source of money for homeowners as well. But one should opt for the loan only after carefully going through its various aspects to avoid any undesired burden.

These loans do not require you to put any of your properties for collateral, making it full free of risks for the borrowers like homeowners. For tenants, these are easier loans to take. Depending on your earnings, credit history and repayment capability, the loans can provide you anywhere from ?5000 or less to ?25000. Repayment of the borrowed amount can be made as per your convenience in six months to 15 years.

However, because there are risks for the lenders, they will charge interest at higher rate on the borrowed amount, in the absence of collateral. So, you should be prepared to make little higher interest payments. In deciding over the rate, usually credit history of the borrower is taken into account, with the good credit borrower getting the loan at lower rate.

Before applying for the loan, check your credit report and ensure that it has no errors. Know your rating on FICO-scale, and try to improve it to get the loan at little relaxed terms-conditions.

As far as bad credit history of the borrower is concerned, approval of the loan comes only when you are prepared for making interest payments at higher rates. You can find these loans despite late payments, arrears, defaults and CCJs.

For taking out unsecured loans at competitive rates, apply for the rate quotes. Compare not only the rates but additional charges as well. Make sure that you repay the loan regularly on due date for escaping any debt build-up.

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