Tag Archives: unsecured 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.
Fast Unsecured Loans UK Timely Finance for Urgent Needs
A loan must come in your hands without delay so that you can put it to timely use. Though usually unsecured loans take less approval time but still there are many reasons for a lender to delay the approval. So to ensure that an unsecured loan is approved without any delay you should be taking certain aspects of the loan in mind. There are host of lenders in the UK who are providing Fast Unsecured Loans UK for urgent requirements like paying for medical bills or meeting educational expenses. You can use the loan for home renovations, debt consolidation, buying a car, and wedding or for debt consolidation etc.
Since there is no property of the borrower involved in unsecured loans as these are given without collateral, the lender does not have to waste many days in property valuation. That is why unsecured loans are faster to approve. But not all lenders will hasten the loan for you. For instance, banks have to go through lots of formalities which take time to fulfill. Financial institutions also are bound by governmental guidelines and they may also delay the loan approval.
To ensure fast approval on unsecured loans in the UK, therefore, you should prefer online lenders. Online lenders have to counter competition, which prompts for a fast approval of the loan. Online lenders provide unsecured loans on simple online application that requires you filling loan details like amount; repayment duration, and some personal information like home address etc. The online application reaches instantly with the lender which enables processing of the loan fast. Within a day or two, usually, you are approved unsecured loans.
But ensure that you have done your homework about the unsecured loans. if you fill loan details inaccurately without assessing your repaying ability and fill larger amount than the lender would approve then the unsecured loan approval may be delayed. Take every aspect of unsecured loans into consideration before making the loan application.
This way even bad credit borrowers can avail Unsecured Loans in the UK Fast. Keep all documents related to income and employments in place so that you do not have to waste time in arranging them later.