What is the main difference between secured and unsecured loans?
Well, basically, what differentiates unsecured loans from secured loans is the aspect of collateral. In other words, an unsecured loan is not secured by any property while a secured loan is.
What is the average repayment period for an unsecured loan?
Basically, unsecured loans are short term loans with a minimum repayment of 2 weeks to a maximum repayment of 12months. In other words, unsecured loans are generally repaid within 12 months or one year.
Can I apply for an unsecured loan though I have a poor credit rating?
Yes you can. In fact, many types of unsecured loans are primarily designed for individuals with a poor credit rating who cannot avail a loan from a high street bank. That said, even if you have a poor credit rating, you can still apply for a line of credit, a payday loan, a signature loan just to mention but a few.
Who qualifies to apply for an unsecured loan?
Simply put, anyone who is a UK citizen, resides in the UK and above the age of 18 years old qualifies to be considered for an unsecured loan. The eligibility requirement is quite simple and basic. You however also need to provide proof that you get some form of income on a regular basis and demonstrate proof that you can repay the cash advance to you.
Of what benefit is an unsecured loan to a person?
For one, if you are strapped for cash and lack collateral to avail a secured loan, an unsecured loan has got you covered. You can apply for say a payday loan as you wait for your pay check. Secondly, an unsecured loan is easy to apply for compared to a secured loan. What this essentially means is that processing of the same is pretty first. Last but not least, if you have a poor credit rating and keen on improving the same, there is no better way to do it than to apply for an unsecured loan and thereafter ensuring you repay diligently without defaulting. With time, the repayments will be reflected in your credit report and serve to improve your score for the better.
Are there penalties for repaying unsecured loans early?
To be on the safe side, it’s imperative that you check this with the loan provider prior to applying. That said, we encourage early repayments of loans as it gives you a good standing and we can therefore say without any fear of contradiction that we do not penalise our customers for early repayments.
What are the different types of unsecured loans?
If you are seeking to apply for an unsecured loan, take note that there are many types that you can choose from depending on your needs or tastes and preferences. Some of the different types of unsecured loans include student loans, signature loans, peer to peer loans, payday loans, credit cards, line of credit, cash advance just to mention but a few.
Under what circumstances may I be denied an unsecured loan?
Ordinarily, your credit score status is usually the reason for being denied a loan. In other cases, lack of collateral is one of the reasons people get denied a loan. However, in the case of unsecured loans, you might be denied if your credit score is very low and therefore the lender deems you as a great risk to them. Conversely, you can also be denied if you have a history of defaulting on repayments or not paying them at all.
Can I use an unsecured loan for whatever purpose?
In most cases, lenders do not really want to know the nitty gritties of how you will spend the money you are advanced under an unsecured loan. You can use the cash to say repair the roof, pay off an urgent medical bill or simply consolidate your debt. Simply put, you can use the cash for whatever purpose provided it’s reasonable.