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UnSecured
Personal Loan Facts
An unsecured loan is a personal loan which does not require you to offer collateral.
In some cases, however, the loan company will still require you to be a home owner.
Not only does an unsecured loan present less risk than a secured loan, an unsecured
loan application is also likely to be turned around quicker.
Adverse credit records, CCJ's, mortgage arrears or debt issues are unlikely to
affect your unsecured loan application. |
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UK
UNSECURED LOANS
What
is an Unsecured Loan?
An
unsecured loan is a personal loan which does not require you to
offer collateral to back the loan, in contrast to secured
loans which require you to use your home as collateral.
People
who use unsecured loans are generally those who are not in a position to
offer to collateral, i.e. people who don't own a home or have adverse credit records,
CCJ's, mortgage arrears or debt issues. Although you aren't required to offer
your home as collateral, it is worth highlighting that many a loan company still
require you to be a home owner in order to be eligible to apply for an unsecured
loan.
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What
are the Benefits of Unsecured Loans?
Owing
to the fact that you will not have to offer your home as collateral against the
loan, an unsecured loan offer less risk to the person taking out the loan
than a secured loan.
One
of the main benefits of unsecured loans is the quick turnaround in applying
for one. Since an unsecured loan does not require your home to be valued
before the application can proceed, the turnaround from making an application
to receiving an answer, and ultimately your loan, is much quicker.
Another
benefit of unsecured loans is the fact that the success rate of applicants
is very high, and although adverse credit records, CCJ's, mortgage arrears or
debt issues will not affect the loan application, it should be remembered that
the better the credit record, the better the loan terms and rates are likely to
be.
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What
can Unsecured Loans be used for?
Unsecured
personal loans can be used for a variety of reasons, including:
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home
improvement - a loan is taken out to carry out home improvements, with the
aim of boosting the value of the home. |
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debt
consolidation - a loan is taken out to pay off current debt, thus consolidating
the debt into one controllable, longer-term loan repayment. |
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mortgage
arrears - a loan is taken out to cover arrears in mortgage repayments, or
to convert current mortgage repayments into a longer-term, more manageable loan
repayment. |
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car
finance - a loan is taken out to finance the purchase of a new car, as the
terms of a secured personal loan are more attractive than other car finance options. |
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adverse
credit - a loan is taken out with a specialist loan company, who, despite
previous adverse credit issues and problems being approved for a personal loan
with other loan companies, are willing to approve a secured
personal loan. |
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