Unsecured Loans: The Lesser Known Sibling Of Secured Loans

What is man's greatest invention?

Some of the latest gizmos would immediately crop up in our minds as the most probable of the answers. But do these gizmos really deserve the veneration that they receive. True, they have revolutionized lives. But they have been characterized with impermanence. Another new invention and the earlier invention is nowhere to be seen.

One invention of man which has withstood the challenges of time is a home. The earlier users of home might have constructed it just for shelter purposes. But it has assumed new roles in a person's life. Besides providing shelter, it has become an indispensable status symbol. Home has continued adopting new fashions and styles, and thus still holds the same esteemed position that it held in the primitive ages.

People revere their houses, and would think twice before taking any step which imperils its existence. Since secured loans entail keeping home as collateral, most people who value their houses would dread taking the loan. A single default may lead to ones house being repossessed. And with this all dreams which the customer and his/ her spouse may have dreamt with their home as a scenic backdrop fades forever.

This single fact has led a large number of people, including those who do not have the luxury of homes, to look for different options, in spite of secured loans offering a much better rate of interest.

"All that is gold does not glitter; not all those that wander are lost". So said J.R.R.Tolkien, an English novelist and scholar. Going by the logic it would be unprofessional to not cater to the vast population who do not want to keep their homes to any kind of obligation, or who do not have a home in the first place, on the grounds that they can cause default in payments.

To fill up this vacuum and to cater to this vast population which was till yet unsatisfied or was debarred from the credit process at the very initial stages because of the absence of home, the concept of unsecured loans was launched.

So what is an unsecured loan? An Unsecured loan is a loan for those who do not take a secured loan. The lender provides the loan without having to keep any collateral. The loan provider in this case has more risk to bear. He doesn't have the cushion of home or property to meet the contingencies like constant default. So he would counter it through a higher rate of interest. But customers who desire to keep their homes safe will bear the high interest rate without flinching. The interest rates may be slightly higher than what is charged for secured loans. One doesn't have to rely on the high street lenders who charge a very high rate. There are many reputable lenders who may offer the most desired terms.

Unsecured loans are very fast in being approved. The lender doesn't need to value the worth of the customers' property, which is the most time consuming process. The result is fast cash for the customers to benefit from.

Since there is no collateral involved in the process, lenders would dread offering loans to those who have a bad credit history. The denial extends even to those who have received County Court Judgements or Individual Voluntary Agreements. But there are lenders who will happily take the risk; of course charging a higher rate of interest for their services.

Taking out an unsecured loan doesn't give one a license to default. The lender can take actions to make good his defaults. While in the case of secured loans the lender would have immediately covered the defaults through liquidation of the collateral; in unsecured loans they would have to take the help of the court, which ultimately results in repossession of the home.

Such court proceedings can result into the customer's name being entered on the defaulters list with the credit agencies for around 6 years. And in these 6 years a person won't be able to get loans as lenders perceive the customer as precarious or bound to default. This would certainly be a very complicated scenario since a person does need loan to meet contingencies.

To skip such a scenario one would have to be very cautious right from the time when one plans the loan. The following checklist would be of immense help:

Decide what amount you really require.
Select the lender.
Decide the amount to be repaid monthly.
Make an optimum balance between the ultimate cost of the loan and the monthly repayments.
Make an optimum balance between the amount of monthly repayments and their number.
Be regular in repayments.

With these points in place one can really enjoy the most out of the unsecured loan and rest assured as to the safety of his home.

Aditya has completed his masters in mass communications from Jamia University. If you need UK Personal secured and unsecured loans visit http://www.ukfinanceworld.co.uk

---

What Is A Payday Loan?

A Payday loan is a small, short-term, high-rate loan. It... Read More

Are You In The Market For a Car Loan?

Car loans are a tempting way to purchase a new... Read More

How To Reduce Your Payments

Are you paying out too much every month for your... Read More

A Consumers Guide to Getting a Bad Credit Loan

Here is a useful guide to getting a bad credit... Read More

What is a Homeowner Loan?

A Homeowner Loan is a way of using the equity... Read More

Benefits of a Bridging Loan

A bridging loan has many benefits, some of which are... Read More

Benefits of a Personal Secured Loan

A Personal secured loan can offer many benefits, some of... Read More

Filling Out The Loan Application

1. Property information. The application begins with a section on... Read More

Fast Cash Advance Payday Loans - Convenient to Use Online

Online cash advance companies offer a convenient and speedy application... Read More

Federal Housing Administration (FHA)

FHA loan programs:FHA AccessFHA Cal GoldFHA Rural GoldFHA Mutal Mtg.... Read More

A Personal Loan And Your Rights

You can use a personal loan for many different things... Read More

Federal Debt Consolidation Loans For Students

For American students, the U.S. Government came up with a... Read More

Many People Have Realized the Convenience and Benefits of Online Personal Loans

The Internet has provided a whole new dimension to obtaining... Read More

A Little Lesson on Loans

The opportunity to spend money is everywhere. There is no... Read More

Useful Tips on Personal Loans

Here are some useful tips on Personal loans. You can... Read More

Industry Regulation and Recent Legislation

A number of states from coast to coast are attempting... Read More

Everything You Need to Know About a Secured Loan

If you're not familiar with the term, a secured loan... Read More

What is an Unsecured Loan?

An unsecured loan is a personal loan where the lender... Read More

Fast Cash Loans - When You Should Borrow and When You Should Wait

A fast cash loan should be an option used as... Read More

SBA Loan: Options, Benefits, and Lenders Part 2 of 2

In this second installment, we will further examine what kinds... Read More

Military Payday Loans

What is a payday loan? This is a small short-term... Read More

How to Find a Cheap Debt Consolidation Loan

If you're shopping around for a cheap debt consolidation loan,... Read More

Fast Cash Now Easier Than Ever, but at a Price?

Because of the Internet, quick payday loans are faster than... Read More

What Are VA Loans?

VA loans are basically mortgages or home loans geared towards... Read More

Getting That Car Loan: Simple Interest Is The Best

So here's the situation: you are buying a car but... Read More

All About Secured Loans

A secured loan is a loan agreement in which the... Read More

High Risk Personal Loans ? Revive Frustrated Loan Hunting Attempts with High Risk Loans

Bad credit seems like an unfinished business, you can't shake... Read More

A Guide to Finding Home Owner Loans

If you're in the process of trying to find home... Read More

Getting a Debt Consolidation Loan

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

Finding the Secured Homeowner Loan for You

If you've been thinking of getting a secured homeowner loan,... Read More

How To Apply For a Business Loan

Worried about how to apply for a business loan? Although... Read More

Do Payday Loans Deserve a Bad Rap?

We have all heard the stories about cash advance lenders... Read More

Cash Loans for Unemployed ? for an Instantaneous Response to Needs of the Unemployed

Unemployment is generally supplemented with several other vices like poverty... Read More