Of the two types of loans in the market today, the loan without the collateral has an edge over the secured variety in terms of popularity. The reasons for this are manifest.
These loans are widely accessed because of the feasibility it provides the lay user. Unsecured loans do not require the loan taker to put anything as collateral to the lender. There is no risk of repossession in case of a repayment default. Also, there is distinctly less documentation hassle, especially when compared to secured loans. Unsecured loans make for ideal short-term loans. They can be used for any purpose, like making home improvements, holidaying, buying a car et al.
Unsecured loans can be availed from various sources, like traditional banks, building societies, the Internet and private lenders. The online alternative provides the best or, at least, the widest range of choices. It also offers expediency to the borrower. One can access a host of lenders at one go, and the response time following the application is quick – generally 24 hours.
With an unsecured loan, one can borrow up to £25,000 with a repayment period of up to ten years. The interest rates when compared to secured loans are higher. This is primarily due to the lack of collateral in case of an unsecured loan. Lenders elevating rates is a way of keeping a safety margin in case of a repayment default.
One should always undertake thorough research and comparison of loan plans in order to have the best chance of availing a good loan, whether secured or unsecured. The ideal unsecured loan is the one that has the lowest interest rates, small monthly installments and a long repayment period. While availing the perfect unsecured loan may be nigh impossible, one can always get a loan that meets most of his requirements, through adequate research.
The author is business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting http://www.longdogfinance.co.uk, as a finance specialist.
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