subject: Unsecured Loans -build Up A Decent Credit Score [print this page] Unsecured loans are, without a doubt, the most popular loan in the UK though recent trends suggest that secured loans are gaining quick popularity in the loan market. However that, in no way, negates the impact of unsecured loans in the online loan market.
Unsecured loans do not require the borrower to pledge any collateral as security in order to avail the loan amount. Herein, the borrower faces no risk of losing his collateral, in case of an inadvertent default. The court option can still be endorsed by the lender, but that may take a lot of time. Apart from the risk-free character of this loan, there are other advantages, too, with such loans.
Unsecured loans are processed comparatively faster than secured loans which is primarily due to the lack of collateral evaluation in case of such a loan. These loans are ideal for short-term purposes. Alternatively, they can also be used to meet exigencies that include, but are not restricted to home improvements, funding vacations, paying childrens education fees etc. The money one gets with these loans can be deployed as per the borrowers discretion. Of course, it is best advisable that the funds be used for purposes that are within lawful boundaries.
With unsecured loans, one can borrow up to a maximum of 15,000, with a repayment period extending up to a maximum of ten years.
However, there are a few cons associated with such loans, one of them being a relatively higher rate of interest with this loan type. In the absence of collateral, the lender looks at cushioning the risks inherent with these loans. However, with a thorough research and comparison, it is quite possible to get such a loan with feasible rates and conditions. One may also get bad credit loans in the unsecured form. However, these loans will have a markedly higher rate of interest.
by: Pamella Scott
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