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What are Unsecured Personal Loans?By David Brooks |
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Unsecured personal loans are personal loans that can be undertaken without the need to secure the loan against collateral, such as a property or a car. This makes unsecured personal loans a good idea for people who do not own their own home and for people who have no other type of collateral to secure personal loans against.
Usually the amount you can borrow with an unsecured personal loan is less than with a secured personal loan. Typically the APR on unsecured loans is higher than too. It is not impossible, however, to find an unsecured loan of up to £25,000 from some personal loans companies with borrowing of up to 10 years, and an APR of between 5.5% and 8%.
Does everyone qualify for an unsecured personal loan?
The majority of people can as unsecured personal loans have a wider reach than secured personal loans. Tenants and homeowners can take out unsecured personal loans, as well young people who have no personal credit history that can be verified. Also, unlike secured personal loans, unsecured loans are available to people who have a poor / bad credit rating. If you have a record of defaulted mortgage payments, arrears on other loans payments or have CCJs filed on your personal credit record, making you ineligible for secured personal loans, then personal unsecured loans will be available for your borrowing needs.
The main requirement for a successful application for an unsecured personal loan is that the applicant has a regular source of income. This will be requested by the personal loan company you are applying to. Background checks will also be made to check you do not have other loans, secured or unsecured, already. The best chance of getting a personal unsecured loan is if the applicant has lived at the same address for three years or more and/or who is married, with stable employment.
For those applicants who are homeowners, personal unsecured loans are ideal if the homeowner does not want to have personal loans officially secured against their property. In fact the most successful applicants for unsecured loans are people who have equity in their property and no other unsecured loans. The homeowner with these benefits will more likely successfully gain an unsecured loan, even if they have bad personal credit history.
Loans companies offering unsecured borrowing in general do not limit what the funds from unsecured loans can be used for, so long as the person taking out the personal unsecured loans does not use the unsecured loans funds for illegal purposes. |
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About the Author |
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