Don't want to put your property at stake? Take an unsecured loan
They say, "No risk no gain." But the phrase may prove to be
other way round if you take a secured loan against your
property. In case of non payment of such loan your property;
usually your house can be repossessed. So, there is a high risk
attached with secured loans. Taking an unsecured loan is the
solution to the problem. An unsecured loan doesn't need any
collateral. You can take an unsecured loan without keeping your
property at risk.
Usually unsecured loans are charged with high interest rates in
comparison to secured loans but unlike secured loans they don't
involve much paper work. You can avail an unsecured loan only on
the basis of your income proof. Usually lenders tend to provide
unsecured loans to non-house owners or tenants, who can't offer
collateral against the loan.
Unsecured loans can be of many types. It can be a
debt consolidation unsecured loan, a personal unsecured loan, a
holiday loan or may be a car loan. Different categories of
unsecured loans are based on different terms and conditions. A
short term unsecured loan has a low interest rate attached to it
but a long term loan will have a high interest rate. Similarly,
a holiday unsecured loan usually has a low interest rate but a
debt consolidation unsecured loan has higher interest rate.
If you have a good credit history you will not face many
problems in getting an unsecured loan but people having a bad
credit background face difficulties in getting such loan. Even
if a person with a bad credit history gets an unsecured loan he
is charged with very high interest. The monthly installments are
also bigger and the repayment period is also short.
Despite all this, unsecured loans are in vogue in the U.K. these
days. This is because more and more people are tending to avail
these loans for their diversified needs. Holiday loans,
educational loans, personal loans, Car Loans and even short term debt consolidation loans
are being taken as unsecured loans. The minimum risk factor is
the main reason of people being attracted more towards unsecured
loans.