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Unsecured loans: A Guide in easy words
It has always been a hard time for an individual to be low on money when the world around you is growing at an unimaginable speed. Money has now become an essential part of a well- being and a status symbol that reflects as to where you stand in a society. It is money, on which the whole world has been divided such that the richest countries fall in the 1st world and those less rich than them are 2nd world and finally the poor countries lie in the 3rd world countries. With such division on a global level, it becomes impossible for an individual to face it all without trouble. Hence the new term Unsecured Loans has been introduced in the society.
These loans are not the big loans that we usually talk about but are actually vocational loans that you might borrow from a friend or family member, or buying from a credit card, banks also offer the unsecured loans and also the credit unions help you with obtaining the small amount of money that can surely take you out of trouble for a while.
But usually all these methods of getting loans are not so reliable besides, since the loan obtained is very less and that it does not come under collateral form of a loan hence the risk for the lender is equally great.
Collateral loans are usually practiced where you place one of your valuable asset with the lender and in return get the loan which is enough to get you going for months or in setting up a business. Not only is the amount sufficient to get you back on track with the rest of the world but also the reliance of the borrower is ensured in terms of the asset that the lender owns in case the individual is unable to repay the loan.
The unsecured loans are preferred over the collateral loans because they not only give opportunity for those who do not own any asset like a house or something but also provide loans at easier terms without a condition besides higher interest on your borrowing. This enables the borrower to work freely with the money and spend them in whatever way they think is right with them.
A credit card purchase is also regarded as the unsecured loan since its a small amount that you borrow from your bank or credit cards company and that you have to pay for at the end of the agreed time.
To sum it up, the unsecured loans are probably the best option for borrowing money for a vacation or a childs care plan but it is definitely not the best for the lender. With their pros and cons unsecured loans still have a market and it has helped a lot of people in their prime bad times.
What Are The Benefits of Prepaid Credit Cards?
Prepaid credit cards have become all the rage lately as these cards provide a valuable financial transaction service that many people have long since needed. Essentially, prepaid credit cards are not credit cards at all because they do not extend credit. That service is the ability to use a debit card wherever credit cards are accepted. Instead of advancing credit charges one draws from a finite amount of deposited cash. Now, some may consider this a somewhat unnecessary service, but when one examines the benefits of prepaid credit cards it becomes obvious that these cards have a great deal to offer.
For starters, prepaid credit cards are a great way to protect oneself from fraud. While we would all like to assume that the world is made up of honest people, it is not. As such, there have been a great number of instances where people have been defrauded of their credit card funds. This happens often online as a number of less than reputable sellers operating out of seemingly unknown locations in the world rip people off for their credit card information. Considering the following common scenario: a person finds a website selling used books and makes a purchase using credit card information and when the credit card statement arrives it is discovered that the $5 book purchase led to $2,000 of purchases with the provided (and compromised) credit card information. Now, a prepaid credit card would be quite beneficial in this instance or in any instance where one is purchasing from an unknown vendor. For example, one could keep a very minimal amount on the prepaid card (say $20) so that if it is compromised the losses will be minimal and the card can simply be discarded.
Also, these prepaid credit cards are the same as using cash to pay for items without having to carry cash around. This can provide a safety net so to speak if the card is lost or stolen. For example, if you record the account number of the prepaid card and the card ends up being lost you could quickly transfer the balance of the card to another account. This way, no money is lost. Now, if a wallet full of cash was lost then…oh well…it is gone forever. As such, the ability to replace cash with an alternate means of payment is always a huge positive particularly one that also has a threshold limit of spending much lower than a credit card as a lost credit card can prove even more calamitous than lost cash.
Another aspect of prepaid credit cards that is supremely beneficial is the fact that these cards are based on a finite amount of money as opposed to advancing money on a borrowed basis. For some, there is a lack of desire to amass credit card debt, but the need for a credit card in the modern world is generally unavoidable. Additionally, there will be those individuals who would like a credit card but for a number or reasons they are turned down due to bad credit, lack of credit, etc. In regards to these problems, these prepaid credit cards come in handy as they provide a solution to such a dilemma.
As one can see, prepaid credit cards have a host of benefits that speak volumes for the value of these cards. So, if worries about lost or stolen cash or credit cards, overextending oneself on credit or simply wanted to avoid the complexities of applying for a credit card, prepaid credit cards provide a simple, safe and sane solution. What better of an endorsement could one ask for than that?