Unsecured Loans: Borrow Money the Collateral Free Way

by : Ashley P Lewis

In the financial market, it is believed that loans are meant to offer assistance to all the individuals irrespective of their background and credit status. But loans are not offered for free as the loan applicants are required to fulfill some conditions. Like pledging an asset or producing various supportive documents etc. However, there are certain borrowers who cannot provide any asset due to some reasons. For these particular borrowers, lenders have designed unsecured loans.

These loans break the notion that only asset owners enjoy the privilege to avail loans. To avail the loans, loan applicants are not at all required to attach any valuable property as collateral. Instead these loans are offered to the borrowers on the basis of borrower's employment, income status, bank statements etc. Moreover, lenders with bad credit can also reap the benefits of the loans by convincing the loan providers with their repayment capacity and subsequent income.

Without any participation of collateral, the approval of the loan is seemingly fast compared to secured loans. The initial amount approved towards the borrower under these loans is ?1000 and which can be extended up to ?25000 depending on the need and specific requirements. The repayment terms for the loans are short and fall in between 6months-10 years. With the assistance of the loans, borrower can easily take care of the needs like home renovation, purchasing a car, consolidating debts, wedding, education purposes, family vacation etc.

The main benefit of availing Unsecured Loans goes to those borrowers who do not have any asset of their own like tenants and non homeowners. By making it collateral free, borrowers who do not want to risk their property for the fear of repossession can also apply for the loans.

The only disadvantage that comes with the loans is its high interest rates. The interest rates are high because lenders advance these loans without security. To cover the risk factor involved, lenders charge a very high interest. But with a proper research of the physical as well as online market can yield some low rate lenders. However it is preferable to compare the quotes of various lenders by using the online mode.

With unsecured loans borrowers get a breather to fulfill their needs without any obstacles.