Unsecured Loan- No Guarantee Required

Whenever finances fall short, borrowing is the first thought that occurs to us. But, there remain many apprehensions in the mind regarding the loan deals. Most borrowers are lured by the idea of unsecured loans and fear taking secured loans that require an underlying asset or collateral.

In case of unsecured debts, the creditor lends money on the basis of the credit profile of the borrower and doesn't demand the home as security. For this reason, unsecured loans carry more risk for the lenders that they compensate by charging a high rate of interest and less flexibility in terms of repayment options.

Cited below are some of the characteristic features of unsecured loans.

The lender does not attach any value to the loan i.e. no security is demanded

A credit check of the borrower is carried to know his repayment history and paying capacity

The amount generally ranges in between £500 to £ 25,000

The repayment period can stretch from one to ten years

These loans generally carry high rate of interest because of the absence of security

If the borrower owns a house, he may get an unsecured loan at cheap rate

In case of default by the borrower, he can be sued by the creditor in the court of law

The processing of unsecured loans is faster than secured loans

Elimination of legal property evaluation and less documentation makes the disbursal fast

As stats reveal, most borrowers in Brits are in debts, and the year 2006 saw an alarming hike in the number of personal insolvencies. This clearly indicates the growing market of bad credit personal loans. Since most of the borrowers already have many debts against their homes, unsecured loans are their only saviours. The high street banks have declared their stringent policies in terms of unsecured loans, and they seldom grant any ad credit loan. So, private and online lenders are the ones who come handy to the borrowers. Though the interest charged on these loans is considerably high, borrowers avail them to get rid of their multiple debts on credit cards and other personal loans.