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Choose The Risk Free Loan Plans
Summary: Unsecured personal loans are the cheap loan options for both homeowners and tenants. These fast processed loans come with easy repayment schemes and a lower rate of interest when compared to credit cards.
The UK loan market is now more competitive than ever, offering you scores of loan plans on liberal terms and conditions. When you enquire upon the nature of these plans, there is every possibility that you may come across some of the low-interest loan plans. There are some loan plans which inherit least risk factors and provide several facilities to the borrower.
Advent of the Internet has made comparison an easier task. With a click on the computer, the borrowers can access scores of loan plans and have free quotes from various lenders.
Unsecured personal loans are the loan plans meeting all legally correct purposes, without residential property security. The terms and conditions that suit a homeowner may not be profitable and ideal for a tenant or a student. Another category of borrowers is there, suffering from bad credit history. Unsecured personal loans can be unanimously called purpose suiting loan plans for all varieties of borrowers. As there is no obligation of home security, all types of borrowers can avail it. The homeowner is free from repossession risk and the tenant gets loan without any hassle. Loan approval and loan processing, both are fast in these plans. Less paperwork makes the loan processing hassle free.
The UK financial market is flooded with scores of unsecured loan plans that offer a maximum amount of 25,000 pounds and come with easy repayment pattern. The repayment period can be extended upto 10 years to make the repayment less burdensome. E-lending, fast processing and lower interest compared to credit cards are other borrower-friendly features of this loan. There is no hidden cost associated with these loans. It means that a borrower has to repay nothing more than the agreed amount.
As these loans do not require residential property security, the risk is shifted towards lenders side. However, the borrower must have a regular source of income. There are several genuine criteria for lending these unsecured loans. Borrowers who are married and have stable employment or those who have residence at the same personal address for more than three years are most likely to be successful in obtaining these loans on easy terms and conditions. Income proofs from borrowers are likely to be demanded by the lenders. Many lenders may also carry out checks for the credit score of the loan applicant. Even if the borrower has a bad credit, he can avail these loans.
Advantages and disadvantages of an unsecured loan
Unsecured loans are loans where you dont need to put up any of your assets as collateral for the loan. For this reason, an unsecured loan might seem ideal since it is perceived to be less risky. However, there are other issues that should be taken into consideration, below is an outline of the advantages and disadvantages of an unsecured loan:
Advantages
Available to both tenants and homeowner
The biggest advantage of unsecured loans is the fact that they make it possible for anyone to borrow money; whether youre a tenant or a homeowner, you can borrow money without putting up any collateral.
No risk to your home
For those who own a home but would rather not risk it, an unsecured loan is the solution since it doesnt directly pose a risk to it or your other assets.
Quick completion
Because theres no title or any other collateral to evaluate, and because unsecured loans are usually in small amounts, loan completion is much quicker than on secured loans, in some cases you can receive the money on the same day of being approved.
Disadvantages
High interest rates
Because unsecured loans are backed only by trust, theyre more of a risk for the lender, the higher the risk the higher it costs to borrow; borrowers with bad credit will face high interest rates on an unsecured bad credit loan, if you have a good credit rating however, this will not be so much a problem for you.
Limited loan amounts
If you need to borrow a substantial sum of money, an unsecured loan is not the solution for you; unsecured loans are given in small amount, usually you can only borrow up to £25000.
Lack of flexibility
When you take out an unsecured loan you agree to pay it back in instalments over a given period of time for example £300 per month for 5years, you will not be able to adjust to a lower payment, also if you wish to pay off the loan sooner, you will face an early repayment fine.
As you can see, an unsecured loan has its pros and cons, ideally if own a home or other property that you can use as collateral, it is better to get a secured loan as the interest rate will be significantly lower. If you have a good credit rating and need a small loan, an unsecured loan is ideal for you.