A general problem among all salaried people is the absence of financial aid
. These people are not granted credit as they may not have an asset to place as security. Unsecured loans are those which are issued and supported only by the borrowers creditworthiness, rather than by some sort of collateral. It can be applied to consolidate previous debts, or to pay off other small loans.
These advances are basically provided without any security. This means that the borrower does not have to place any security. Thus the rate of interest charged is high, and it reduces the risk involved. These finances can be used for home improvements, buying a vehicle, financing marriage, medical expenses, and education expenses.
Unsecured loans can be availed in short term and long term advances. The applicant must have a regular source of income. He must have a stable source of employment. He must be employed in one place for more than 6months. The lenders may request for income proof to be submitted. Many lenders may also carry out back ground checks for the credit score of the loan applicant. Only people who have permanent citizenship of the UK can apply for credit.
The amount generally sanctioned for unsecured advances ranges from 1000 - 25000. The repayment period is long i.e. for 10years. The monetary aid granted is obviously less as compared to secured advances. The borrower must try to repay the loan at the earliest as the interest rate charged is higher as compared to other loans.
Unsecured loans can also be availed for on the net. This avoids the need to stand in line to apply for advances. The rate of interest charged, and the conditions differ from lender to lender. The application form can be easily applied for; it only requires the basic details of the applicant to be filled in.