Unsecured Loans
Unsecured loans, sometimes refered to as personal loans in contrast to secured loans are not guaranteed against an asset. These loans are generally available to anyone, not just people with properties.
Unsecured loans benefit from the following;
- There is less paperwork
- The processing time of the loan is quicker
- There are a wider choice of lenders to choose from
As unsecured loans are offered without the need of an asset, the interest rates and re-payment schedules can be prohibitive for those wishing to borrow large sums of money. Also for those people who have or are experiencing credit difficulties may find it difficult to get a loan of this nature.
Advantages of unsecured loans
- Fast decision and payout times
- Low paperwork
- Can be used for any purpose
- Wide range of organisations to choose from
- Available to non property owners
Disadvantages of unsecured loans
- Difficult for those with poor credit history
- Short repayment terms (typically only up to 7 years)
- Higher interest rates charged
The decision as to what type of loan you choose, unsecured loan or secured loan is up to the individual but with an unsecured loan the typical repayments will be much higher than with secured loans but you will not loose your home is you default on the loan.
