Unsecured Personal Loans
Unsecured Personal Loans are those that do not have any collateral attached to them. This type of loan is often easy to get, but know in advance you will be paying a higher interest rate on the loan.
This is because there is a great risk of non-payment due to the no collateral issue. Most unsecured personal loans are for amounts up to $15,000.
You may find some loan companies that offer a higher amount, but that is a standard loan amount in the industry. If you know you will need an unsecured personal loan for more than $15,000 you can try to secure two or more such loans from different companies.
Uses for Unsecured Personal Loans
Unsecured personal loans can be used for many things. Sometimes a person takes out such a loan to improve their credit rating. If this is the case, then it is very important that you make all payments on time. You will want to pay the loan off early if possible.
Not only will this look great on your credit report, but you will save yourself money in interest. Other uses for these types of loans include a vacation, home repairs, remodeling, vehicle repairs, education, or medical expenses. The possibilities are endless.
One of the biggest uses for an unsecured personal loan is to consolidate other unsecured debt. This is often credit card debt.
The amount of interest you will pay for the unsecured personal loan is generally going to be less than you will pay overall if you pay off each of the credit cards you are considering consolidating. You will only have one payment to make each month.
It is very important that you don’t run up more charges on your credit cards after consolidating them with an unsecured personal loan. If you do, financial disaster is likely to be just around the corner. Make sure you have a solid budget and financial plan in place.
Where to Get Unsecured Personal Loans
There are many places to secure a personal loan from. You may do so at the bank you have established accounts with or even one of your credit card companies. There are many unsecured personal loan companies on the internet.
You can fill out a form on a website and have a response in just a few minutes regarding the status of your loan application. This process is fast, secure, and is a great choice for those who are embarrassed to go to a loan officer and ask for money.
Be careful if you decide to apply for an unsecured personal loan online. There are many reputable companies out there, but there are just as many scams. They often prey on individuals looking to borrow money.
You can check up on an online loan company by checking with the Better Business Bureau. You can also search the internet for reviews by other users of this company.
If you can’t find any information about the business anywhere, stay away from it. There is a good possibility that the business is running a scam and continually changing its name to avoid being caught.
An internet loan company should never ask you to send them an application fee or processing fee. If you are asked for one, end all contact with that business.
These loans are a great way to generate money for other needs. They are generally easy to get regardless of your credit history. Shop around for a good rate. Remember that the rate is going to be slightly higher than that of a secured personal loan.
As with any type of loan, make sure you use the funds wisely. Financial security is very important. Just because there is no collateral attached to the loan doesn’t mean you have an easy out for not repaying it.
Doing so will severely cripple your credit rating and credit score. It will also affect your ability to secure an unsecured personal loan in the future.