Why Choose an Unsecured Loan?

Why choose an unsecured loan? An unsecured loan can be used for almost anything - a relaxing holiday, a new car, a wedding, debt consolidation or home improvements. These are just some of the reasons why people choose an unsecured loan.

If you want to raise money for most purposes but do not want to offer your home as security then an unsecured loan could be the solution.

For an unsecured loan the amount and period you can borrow varies. Lenders offer loans even as small as £500 and can go up to £25,000. The repayment period can be anywhere between six months to ten years.

Unsecured loans are offered by banks, building societies and also by the larger supermarkets chains.

Whatever you need it for there are a few things to consider before applying for an unsecured loan.

With an unsecured loan, the lender has no claim on any particular asset. Unsecured lending is generally more risky than secured lending, which is reflected in the relative rates of interest.

An unsecured loan is actually a loan where the lender has no claim on a homeowner's property in case the person fails to repay. The lender is solely relying on the ability of the borrower to meet their loan borrowing repayments.

With an unsecured loan, you're not borrowing against the value of your house. You will usually be offered an interest rate based on your circumstances and the amount you want to borrow. This means that the 'typical' interest advertised might not be the rate you are offered - your rate will depend on your credit rating.

If the borrower defaults on an unsecured loan the lender cannot repossess the goods, but has to resort to other legal remedies to recover the capital, interest and costs.

You should usually borrow as little as possible, and draw up a budget plan to determine how much you need. An unsecured loan might not offer a particularly high amount, so if you're a homeowner and need to borrow more, you could look into secured loans.

Unsecured loans are invariably more expensive than secured loans because the lenders have no guarantee that you can repay the loan, and therefore charge you more in interest to cover the cost of insurance policies that they need to take out to protect them should you default on repayments.

In the event that a borrower does not pay up, the lender will invoke the terms of the legally-binding credit agreement and pursue the borrower through the legal system.

Lenders are obliged by law to tell you how much they charge for this type of finance and this is worked out as an annual percentage rate (APR). Ask whether the APR figure quoted is 'typical' or is what every applicant is charged.

Check whether there is an early repayment penalty.

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

No Money Down Loans

You want to buy a home but you do not... Read More

Shopping for a Personal Loan

Most Internet users are now extremely comfortable using the Internet... Read More

What Is A Payment Protection Plan?

A Payment Protection Plan is an insurance cover you would... Read More

The Truth In Lending Act

With a stated objective to help consumers, Congress deemed it... Read More

Fast Payday Cash Loans

Do you need fast cash to get your car fixed... Read More

Information About Debt Consolidation Loans with Bad Credit

Finding debt consolidation loans with bad credit can be quite... Read More

Finding the Best Secured Loan for Your Money

If you're looking for a secured loan, there are several... Read More

How to Find Cheap Loans UK

For the individual in need of cheap loans UK, it... Read More

Loans - Good or Bad Debt?

When borrowing money it is usually because we lack the... Read More

Finding the Loan UK that Meets Your Needs

For those in the market for a loan UK ,... Read More

Why Choose a Bad Credit Personal Loan?

Listed below are some of the reasons for choosing a... Read More

Relax, Unwind, and Enjoy With American One Secured Personal Loans

Secured Personal Loans are those loans against which you don't... Read More

Used Car Loans - 3 Tips For Financing Your Used Vehicle Online

Financing the purchase of a used vehicle can be done... Read More

Understanding Secured Loans

A secured loan is any loan that is secured on... Read More

Steps You Can Take To Protect Your Financial Information and Personal Identity From Fraud

Financial fraud and identity fraud are one of the fasted... Read More

Why Choose a Homeowner Loan?

Outlined below are some of the reasons for choosing a... Read More

Why Payday Loans Should Be Avoided

If you are considering getting a payday loan for the... Read More

Instant Car Loan - Get an Approval Online Quick

Your car loan is now less than an hour away... Read More

Why Choose a Secured Personal Loan?

Listed below are some of the many reasons why you... Read More

Can A Pay Day Loan Truly Be Easy?

If you're looking to find an easy payday loan it's... Read More

A Guide to UK Secured Homeowner Loans

Trying to find good UK secured homeowner loans might seem... Read More

Instant Cash Advance Loans - Take Advantage of The Convenience of The Payday Loans Available Online

Cash advance loans not only provide you with instant cash,... Read More

Guide to Loan Terms

Listed below is a guide to loan terms. It is... Read More

Student Loans Are The Life Preserver Of The Education System

A loan is the reason many students are able to... Read More

Applying for a Payday or Cash Advance Loan Online

Applying for a payday loan online is a quick and... Read More

Bad Credit Personal Loan - A Pay Day Loan May Be Your Best Option, No Credit Check

If you have bad credit, have an emergency and need... Read More

If You Consider To Get a Quick Cash Loan Then Reconsider It

A quick cash loan also called payday loan, cash advance... Read More

Should You Ever Take a Payday Loan?

Payday loans have many names -- cash advances, signature loans... Read More

Secured Loans - UK Overview

Borrowing money has become more and more popular in the... Read More

What To Consider Before Applying For A Loan

Here are some useful tips on what to consider before... Read More

A Secured Loan Could Save You Money

What is a Secured Loan?A secured loan is any loan... Read More

Getting a Debt Consolidation Loan

Should you find yourself getting in over your head with... Read More

A Guide to Finding Fast Homeowner Loans

Sometimes finding fast homeowner loans can seem impossible? no matter... Read More