Unsecured personal loans are personal loans designed to be
undertaken without the need to secure the loans against
collateral, such as a property or a car. This makes unsecured
personal loans ideal for people who do not own their own home
and for people who have no other type of collateral to secure
personal loans against.
The extent of borrowing on unsecured personal loans is generally
less than on secured personal loans, and the APR on unsecured
loans is often higher than on secured personal loans. But,
having said this, unsecured loans of up to £25,000 are possible
from some personal loans companies. You can also obtain personal
loans with repayment terms on unsecured borrowing of up to 10
years, and an APR of between 5.5% and 8% on unsecured loans.
Who qualifies for unsecured personal loans? Unsecured personal
loans have a wider reach than secured personal loans. Both
tenants and homeowners can take out unsecured loans, as well
young people who have no verifiable personal credit history.
Additionally, unlike secured personal loans, unsecured loans are
also open to people who have a poor credit record. If you have a
record of defaulted mortgage payments, arrears on other loans
payments or have CCJs filed on your personal credit record,
making you ineligible for secured personal loans, then personal
unsecured loans may be for you.
To successfully apply for personal unsecured loans, the
applicant for the unsecured loan must have a regular source of
income. Proof of income from the unsecured loans applicant is
likely to be requested by the personal loans companies, and many
loans companies will also carry out background checks on other
loans, secured or unsecured, that the personal loans applicant
holds now or has held in the past. Personal unsecured loans
applicants who have been resident at the same personal address
for more than three years and personal unsecured loans
applicants who are married and have stable employment are those
most likely to be successful in obtaining personal unsecured
For homeowners, personal unsecured loans are ideal should the
homeowner wish not to have personal loans officially secured
against their property. The most successful applicants for
unsecured loans in these cases are people who have equity in
their property and no other unsecured loans. These factors above
all else will help the homeowner applicant acquire unsecured
loans, even if the homeowner has a bad personal credit history.
Loans companies offering unsecured borrowing in general do not
limit what the funds from unsecured loans can be used for, so
long as the person taking out the personal unsecured loans does
not use the unsecured loans funds for illegal purposes. With
unsecured loans, the sky really is the limit!
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