To avail a loan without collateral was considered a big feat as the lenders wanted security against their money so that their money would surely be repaid. But now the situation has changed. Lenders do not mind lending money to borrowers without asking for any security. This change has been incorporated in society due to the increasing number of non-homeowners in society. This makes the unsecured personal loans a very popular choice.
An unsecured personal loan can be used for any purpose like debt consolidation, home improvement, setting up or re-establishing a business, a vacation, wedding expenses, college funding, etc. All the needs of a borrower can be satisfied through an unsecured personal loan.
Unsecured personal loan offers an amount ranging from UK holiday cash loans £3000-£25000 without pledging any collateral. However, the amount that can be borrowed depends on the following points:
- The repayment ability of the borrower
- His earlier credit history- whether the borrower has a good credit score or not.
- His regular employment status also forms a requisite criterion for availing the unsecured personal loan.
An unsecured personal loan is borrowed with a term of 6 months-10 years for its repayment. The repayment is made in the form of monthly installments. The rate of interest is slightly higher than secured loans due to the non-involvement of security. But this aspect can be dealt with with the help of proper research among numerous lenders.
Bad creditors also can avail of unsecured personal loans but at a raised rate to cover the risk factor involved with the repayment of the unsecured personal loan. But there is a way to cut down this rate. By furnishing good repayment ability, a bad credit borrower can get the loan at a lower rate.
An unsecured personal loan is a perfect way of borrowing money for people who willingly or unwillingly do not want to pledge collateral for money. No involvement of security makes it popular among tenants and non-homeowners. So this opportunity should be availed whenever there is a need for money.
Summary
An unsecured personal loan can be obtained easily by furnishing the basic details by the borrower. No collateral is required to avail of this loan.