Tag: Unsecured Loans

Unsecured loan options in India

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loan. Here, property relates to real estate property. The loan is granted purely on the basis of the income of the borrower and his stated expenditure. As no big collateral is pledged against the loan so customer is safe against any type of forfeiture which is an obvious part in secured loans where collateral is a must. This loan options is, therefore, more popular among the borrowers as they can afford repayment which is charged every month in the form of Easy Monthly Installments (EMIs).

The amount of the EMIs is determined by the bank itself and it depends upon many things including the age of the borrowers, their income per month, the duration of their service left and obviously the amount of the loan granted. The repayment of these unsecured loans can be done quite easily by maintaining a steady balance in the bank account every month as the amount of loan is deducted automatically by ECS or Post Dated Cheques (PDCs). “>Loans are financial assistance to the people who need money to meet some urgent and unidentified expenditure. In India, two types of loan options are available for the borrowers. These are known as Secured Loans and Unsecured Loans. Both these types of loans are useful for the consumers as they have different terms and conditions. As far as unsecured loans are concerned, they are slightly safer for the customer as they available with better terms and conditions.

Unsecured loans are available without pledging any property against the loan. Here, property relates to real estate property. The loan is granted purely on the basis of the income of the borrower and his stated expenditure. As no big collateral is pledged against the loan so customer is safe against any type of forfeiture which is an obvious part in secured loans where collateral is a must. This loan options is, therefore, more popular among the borrowers as they can afford repayment which is charged every month in the form of Easy Monthly Installments (EMIs).

The amount of the EMIs is determined by the bank itself and it depends upon many things including the age of the borrowers, their income per month, the duration of their service left and obviously the amount of the loan granted. The repayment of these unsecured loans can be done quite easily by maintaining a steady balance in the bank account every month as the amount of loan is deducted automatically by ECS or Post Dated Cheques (PDCs).

Unsecured Loans-Loan against collateral

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In the loan market, there are various categories of loans accessible. Loans are obtainable in both secured and an unsecured form. Secured loans can be opted by those who can afford to pledge some costly assets as collateral against the loan. For an unsecured loan, a borrower need not pledge any assets as security. Of late, there has been a go up in the number of people opting for these loans. The cause is very easy. These loans do not carry any kind of risk for a borrower. There has been a steady rise in the number of people opting for these loans. Most of the borrowers choose for these loans to consolidate their debts. A borrower can profit by opting for these loans. These loans are accepted fast and without difficulty. As there is no security attached to the product, the documentation attached to this loan is less. These loans are very simple to avail too. Hence, unsecured loans are very simple to avail. If you are a tenant, you can without difficulty avail these loans. A borrower can meet any type of expenses with these loans. Unsecured loan for tenants are free from all kinds of risk, though all borrowers for all time consider repayment acutely. These loans are especially suited for tenants, non homeowners or students staying away from house. They do not obligate you to put up security which serves as a guarantee of refund to the lender. If you are a borrower on the lookout for loans at a lower price of interest, you can choose for low rate unsecured loans. You can fulfill any of your personal wants with these loans. If you have tried at every probable place and failed to obtain a proper loan, then you can make use of these loans. With the assist of cheap personal loans, you can meet any of your requirements. These are the most favored types of loans as they are obtainable at a cheaper rate of interest. What’s more! The loan can be repaid without difficulty too. These loans come with a lower risk tag attached to them which again increases their status. Moreover, they are simple to obtain approved too. With unsecured loans, the onus of the risk rests with the lenders. Hence, they as well carry a higher APR as compared to secured loans. Unsecured Loans are not accepted instantly though and carry a higher rate of interest. A borrower can benefit a loan much faster by looking online. You are free fro placing any security against the loan. These loans create a good choice for those with credit troubles too.

Secured or Unsecured Loan

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Deciding whether to get a secured or unsecured loan is the most basic decision you can make when deciding to borrow money, and will effect every part of your borrowing experience. There are a number of factors to look at for each of these scenarios that can help you make this decision for your situation.

The first thing you need to understand is how lenders decide whether to approve applications and what interest rate they will offer you. Most know that they look at your credit report and your income, but what they are looking for is the level of risk you represent. They are looking at how likely it is that you are going to make your payments every month on time.

With that in mind, the basic difference between a secured or unsecured loan is collateral. If you have some collateral to offer, such as real estate, a vehicle, jewelry, or other high priced collectible, then the lender has some way to collect his money regardless. This means you will be offered lower interest rates and lenders will be more flexible if you have a low credit score or need a longer repayment schedule.

It is important to note that banks will generally only accept real estate as collateral, for other forms you’ll need to try other lenders, there are many of them online. Also, because your collateral will have to be appraised, the application process will probably take a little longer.

If you don’t have collateral you’ll be offered a slightly higher interest rate and your credit history becomes a lot more important. Your application will be mostly judged upon your credit score and if your scores are low you might not be approved and if you are you will be offered much higher interest rates.

It breaks down to this- with collateral you can get lower interest rates and more flexibility from your lender with a secured loan, or an unsecured loan without collateral will get you faster approval, but with high interest rates.

Visit these sites to learn more about the benefits and costs of Secured Credit Loans or Unsecured Loans for every situation.

Shopping For the Best Unsecured Loan

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When shopping for an unsecured loan, a common concern amongst
potential borrowers is, how do I get the best rate? Often, people take
out an unsecured loan to fulfill an immediate need, such as paying back
taxes or funding the start-up of a new business, so they don’t always
have time to search for the best interest rate. When shopping for an
unsecured personal loan, getting the best rate is the main concern.

What are unsecured loans?

Unsecured
personal loans are personal loans that do not require you to put down
anything as collateral. Most of the time, you do not need to have a
co-guarantor (or co-signor) nor proof of home ownership. The loan amount
will be given to you as a lump sum, which you have to pay back in
installments. An unsecured loan differs from a line of credit, in that
the line of credit may be reused over and over again through a certain
period of time. The unsecured loan is only good while the lump sum
awarded to you lasts. When it is gone, it is gone.

Types of Unsecured Loans

One
type of unsecured loan is the payday loan which may only require
evidence of your electronic signature. The lender will deposit your loan
amount into your bank account. You pay back the loan on your next
payday, when you receive your paycheck. Payday loans carry a very high
interest rate, so the money should be paid back as soon as possible.
With this in mind, a payday loan should really only be used in extreme
financial emergencies.

Another common form of unsecured personal
loan is the credit card. The balance you incur with a credit card is
supposed to be repaid within a month. If you fail to pay, this unpaid
balance turns into debt on which the credit card company will charge
additional interest. Credit cards are currently the most used form of
unsecured personal loans. The interest rates on credit cards are quite
high, so it is best to repay the borrowed amount in as little time as
possible.

A bank overdraft is another type of unsecured personal
loan. You take out a bank overdraft when you are permitted by the bank
to withdraw more money than is available in your bank account.

A final type of unsecured personal loan is the type
that you take out from a bank. Like a tenant loan, an unsecured personal
loan is one that does not require you to secure the loan with a
valuable piece of property. An unsecured personal loan from a bank also
carries a higher interest rate than a secured loan because your lender
is taking on a larger risk by lending to someone who does not have any
collateral.

Bad Credit Loan Shoppers

Often,
unsecured loans are sought after by potential borrowers with bad
credit. Seeing as how unsecured loans already carry a higher interest
rate than secured loans, a person with bad credit will have to pay much
higher interest charges. The best way to avoid being seriously
overcharged on interest is to try to improve your credit before you seek
an unsecured loan.

Tips on Improving Your Credit

  • If for some reason you do not yet have a bank account, getting one
    is a definite step in the right direction. When you are applying for an
    unsecured loan, you bank account information will be taken into
    consideration when the lender is thinking of approving you for the loan.

  • Apply for some department store cards or secured credit cards. The
    records of these cards will be submitted to the credit bureaus, and
    this will help to establish a positive credit rating. When a potential
    lender sees that you have got positive credit based on the records of
    these cards, they will be more inclined to not only offer you the loan,
    but to provide you with a better rate.

  • Only purchase within your means. If you only make credit purchases
    that you will surely be able to pay off on time, your credit rating
    will reflect your on-time payments, thereby improving your credit score.

Unsecured Loans for Advances not Against Collateral

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Unsecured loans are offered without any collateral. This implies
that a borrower will not have to part with rights on home or any asset
for availing the loan proceeds. There are two categories of people who
use unsecured loans. Firstly, there are tenants and non-homeowners who
use unsecured loans out of necessity. The second group is of homeowners
who have lately joined the users of unsecured loans.

Homeowners
traditionally were the customers of secured loans. Through secured
loans, these borrowers were able to get hold of excellent deals,
complete with a low rate of interest and easy repayment options.
However, the apprehension regarding repossession of home was not to be
shrouded under the attractive features. Though this has been accepted as
no more than a myth, many of the regular customers of secured loans
were dispersed as a result of this. These customers opted for unsecured
loans.

Unsecured loan providers do not get a direct stake on any
asset. Even if borrower fails to pay the loan amount in full, loan
provider cannot undertake direct action to recover unpaid amount.
Compare this to secured loans, and you find the lender misses no time to
liquidate asset in his possession. One only gets a little extra time
when using unsecured loans. Beyond that even unsecured loan providers
are going to initiate legal proceedings to recover the amount.
Therefore, unsecured loans must be taken as seriously as one would a
secured loan.

Unsecured loans are advanced in the range of �1,000
to �25,000. The sum is relatively low in contrast with sum lent in
secured loans. Therefore, unsecured loans are best used when the
expenses involve lesser amount. Minor home improvements, footing holiday
bills or debt consolidation form the most common uses of the unsecured
loan proceeds. Unsecured loans are very adaptable to all kinds of
personal purposes.

For raising unsecured loan, borrower must
preferably have a good credit history. This loan is lent against
personal credibility of borrower in the absence of collateral. A
borrower with bad credit can face difficulty in qualifying through high
street lenders. For brokers however, this is an easy task. A broker is a
mediator between banks and borrowers. When broker approaches banks with
the application of borrower, they get a better response. Banks know
that brokers may have undertaken tests of credibility; therefore, they
lend to the applicant.

When borrowing through unsecured loans, borrowers
particularly feel the pinch on the clause of APR. APR or the rate of
interest is generally higher in unsecured loans. The higher risk
involved is to be blamed for the increased APR. Increased APR is
inevitable and therefore reasonable. However, the premium over the
reasonable APR that borrower have to shell is evitable. Borrowers can do
two things in order to avoid paying unreasonable rates. Firstly, they
must be up-to-date on the prevailing rates, lowest rates, rates
according to credit circumstances and the different interest options in
the UK. Secondly, borrower must accept the fact that it is not difficult
to get good deals. Proper research is what is required to achieve
these. Research nowadays is easier, thanks to the massive resources on
the web. A person can view several loan providers' products and gain
important information about them; all for free and in a small span of
time.

Nowadays, borrowers' application is received through the
online mode. Loan providers have thus made the process of raising cash
convenient for borrowers. It has also been convenient for loan
providers, as they do not have to directly deal with the customer
traffic.

Unsecured loans have to be repaid between 5 to 25 years.
Borrowers generally enjoy discretion on the method of repayment. The
monthly or quarterly repayment method scores over other methods in the
sense that the loan is successfully repaid and borrower is not
over-burdened.