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A Guide To Unsecured Loans

You can usually get most personal loans without any collateral. Depending on your income and credit rating, you can borrow money from a bank or other credit institution without any collateral. A full credit check will not be required if you are getting unsecured loans from an online credit provider.

Instead, you will bring a bank statement and a recent pay slip to prove that you are earning income. Once accepted, the online lender will deposit the money into your bank account.

Personal loans provide a practical way to finance a personal project. It allows you to pay for wedding or buy furniture with ease. It can be an automobile, a motorcycle, home appliances, a holiday getaway, renovations and more. The option is also ideal for covering every day or occasional expenses, such as rent, small purchases, taxes and educational costs.

A personal loan is well suited to a wide variety of uses. This category of credit benefits individuals wishing to have funds for the implementation of a project.

Types of unsecured loans

You can take advantage of various types of unsecured loans to suit your specific needs. Selecting the ideal loan makes it easier to reduce the cost of borrowing.

Signature loans have no special requirements when it comes to assuring the lender that payments will be made as agreed. You will be required to simply put your signature on the loan documents. Credit unions and banks offer these types of loans. The funds can be used for a wide variety of purposes. Signature loans are typically paid via instalments, which amortize over a given period of time.

By opting for these loans, you benefit from the low interest rates. However, credit institutions only approve borrowers with good credit scores. The loans provide a practical way to build a good credit record with the aim to benefit from even cheaper borrowing in the future.

Credit cards allow you to enjoy access to extra funds on a long-term basis. They give you an opportunity to obtain funds on demand based on current financial needs and the applicable credit limit. This option is one of the easiest way to borrow. The process of borrowing is instant at any given time of the year. Once you are approved for the card, you will enjoy peace of mind knowing there is extra funds available to you.

On the downside, credit card debt is associated with high interest rates. Banks may offer you great rates in the beginning, but the honeymoon ends after a while.

How does an unsecured loan work?

If you want a small amount, it is possible to apply for unsecured loans. Some banks may require you to borrow more than you need. If you only want $1,000 or less it may be reasonable to opt for a personal loan online. The application process is very simple. It does not require a complete credit check and you get loan approved much faster.

Most of unsecured loans are available at higher interest rates. However, you will reimburse a smaller loan (less than $ 1,000) faster. This means that you will not pay high interest rates for too long.

On the other hand, you will exercise good judgment by applying for a secured loan if you make a larger loan than you expect to pay in more than six months. Its lower interest rate will save you money in the long run.

So, to find out what kind of loan will work best, you will need to analyse your needs. If you want to borrow a small amount and pay it off quickly, an unsecured loan from an online lender might be a great option. However, if you want a larger amount than you will pay in more than six months, you can certainly consider a secured loan that will offer you a better interest rate.

What are the advantages of unsecured loans?

One of the most important advantages for consumers of unsecured loans is the speed of the process. With secured loans, a lot of paperwork is usually necessary. In some cases, the consent of the guarantors is needed to proceed with the application. The other essential advantage is that if the borrower does not fulfil the obligations, the lender will forfeit the collateral, which can be a home.

Facing such an outcome is undoubtedly traumatic for any homeowner or borrower. The situation is also tricky when you pledged a financial product like savings or life insurance and cannot pay the loan amount.

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

 

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

 

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.

Paloma Digital Ltd. Company Registration No. 6934249. Registered Office: Office 229, 275 Deansgate, Manchester M3 4EL.