Unsecured Loans: Secured Through Unsecured Loans
Generally, asset are of utmost important while availing a loan
. The borrowers pledges these asset of theirs as security against the loaned amount. Hence, the risk involved is reduced or shifted to the borrower. Similarly, absence of the collateral can make things pretty tough for the person applying for a loan. But, with unsecured loans the borrower do not require this asset while availing a loan and hence the risk is on the lender's side rather than the borrower's side. This is the reason unsecured loans are very popular among people with no asset to pledge like tenants or students and with people who do not want to pledge their assets for different reasons.
This non involvement of the collateral has made this loan a very popular product in the UK loan market. The interest rate or the APR(annual percentage rates) of the loans depends on various aspects like the credit rating of the borrower, amount of loans availed, tenure of the loan and any other previous loan. These interest rates are relatively on the higher sides compared to secured loans but there are multiple
cheap unsecured loans deals that are also available in the market. Similarly, the amount of loans depends on these factors and can be from 1000 to 25000. And the unsecure nature of the loan is responsible for the tenure of the loan which can range from few days to 10 years.
There are various categories of unsecured loans that are available currently in the loan market. These includes bad credit unsecured loans, payday loans, tenant loans, unsecured personal loans and many many more. Out of these tenants loans and payday loans are hugely popular in the UK market. The reason being the fast and easy availability of cash to borrower's disposal.
A person can need money for anything and anytime. And if at that moment he/she do not have a collateral to pledge the loan procurement procedure becomes very hard. Unsecured loans is a loan for these requirements and needs.
by: Shelly Dicousta
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