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Unsecured Personal Loans

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									by: Matthew Bourne

Unsecured personal loans are personal loans designed to be undertaken without the need to
secure the loans against collateral, such as a property or a car. This makes unsecured personal
loans ideal for people who do not own their own home and for people who have no other type of
collateral to secure personal loans against.

The extent of borrowing on unsecured personal loans is generally less than on secured personal
loans, and the APR on unsecured loans is often higher than on secured personal loans. But,
having said this, unsecured loans of up to 25,000 are possible from some personal loans
companies. You can also obtain personal loans with repayment terms on unsecured borrowing of
up to 10 years, and an APR of between 5.5% and 8% on unsecured loans.

Who qualifies for unsecured personal loans?

Unsecured personal loans have a wider reach than secured personal loans. Both tenants and
homeowners can take out unsecured loans, as well young people who have no verifiable personal
credit history. Additionally, unlike secured personal loans, unsecured loans are also open to
people who have a poor credit record. If you have a record of defaulted mortgage payments,
arrears on other loans payments or have CCJs filed on your personal credit record, making you
ineligible for secured personal loans, then personal unsecured loans may be for you.

To successfully apply for personal unsecured loans, the applicant for the unsecured loan must
have a regular source of income. Proof of income from the unsecured loans applicant is likely to
be requested by the personal loans companies, and many loans companies will also carry out
background checks on other loans, secured or unsecured, that the personal loans applicant holds
now or has held in the past. Personal unsecured loans applicants who have been resident at the
same personal address for more than three years and personal unsecured loans applicants who are
married and have stable employment are those most likely to be successful in obtaining personal
unsecured loans.

For homeowners, personal unsecured loans are ideal should the homeowner wish not to have
personal loans officially secured against their property. The most successful applicants for
unsecured loans in these cases are people who have equity in their property and no other
unsecured loans. These factors above all else will help the homeowner applicant acquire
unsecured loans, even if the homeowner has a bad personal credit history.

Loans companies offering unsecured borrowing in general do not limit what the funds from
unsecured loans can be used for, so long as the person taking out the personal unsecured loans
does not use the unsecured loans funds for illegal purposes. With unsecured loans, the sky really
is the limit!

This article was posted on February 23, 2006

								
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