Unsecured Loans: Dont Put your Home as Collateral

by : Aisha Cristal

People prefer unsecured loans for meeting their varied needs. The basic reason for people taking an unsecured loan amount is that they want to avoid the threat of repossession of their property. People find it as a better alternative to avail a smaller loan amount with a shorter repayment term.

A borrower can get a loan amount anywhere from ?500 to ?25000. The repayment term is shorter as compared to a secured loan. People can fulfil most of their needs with unsecured loans. Whether you want to consolidate your credit card debts or would like to go for a holiday trip, an unsecured loan is a viable choice to meet most of your needs and requirements.

Unsecured loans are a feasible loan option for the tenants and those homeowners, who don't want to put their home as collateral. It is a boon for the tenants, as they don't have their home, which can be put forth as collateral.

People whose credit history is less than perfect, can also seek an unsecured loan, if they fulfil the loan criteria of the lenders. A bad credit history could be anything like missed payments, defaults, or County Court Judgements. You may get an opportunity to improve your credit history as well with this loan option.

The eligibility criteria for availing unsecured loans are that you should be above 18 years of age, and a UK resident. Since, the lenders have larger risk while offering this loan type, so they charge higher rate of interest as compared to a secured loan option.

But, before going for this loan type, you need to compare the loan quotes from the different lenders across the UK. You can approach high-street banks, building societies and the private lenders in the UK. But, people are showing inclination towards private lenders, as they are offering competitive rates due to the fierce competition among themselves.