Emergency needs can occur anytime. To meet the short term needs, individuals may need money urgently. For such, short term loans or unsecured loans are a great solution. The most attractive aspect of unsecured loans is that you can get them easily without much credit check and collateral. Very similar to personal loans and credit card cash advances, unsecured loans ask for the high rate of interest. For unsecured loans, eligibilities are not as tough as for bank loans. You need to be 18 years old and a registered citizen. The lenders do not ask for collateral and high credit score.
Borrowers may need funds for –
- Pay off taxes
- Home improvements
- Credit card debts
- Pay off uninsured medical bills
- Wedding or honeymoon expenses
How are unsecured loans done?
The unsecured loans are the amount given by the lender against a post dated cheque. The payment has to be made by the borrower after a stipulated date. It depends; it may be weekly or bi-weekly. The post dated cheque includes the repayment period and plus the fees. The financial rates range from 15% to 30% for the borrowed amount. The unsecured loans sometimes may be dangerous. It offers convenience but has some negative aspects.
Unsecured loans come with a high cost
As the due date approaches, the payment has to be made in full. The unsecured loans are renewable and can be extended, if your credibility allows. But it may keep borrowers in an endless cycle of increasing debt of unsecured loans.
Amazing benefits of unsecured loans
- No lead time – Going at a bank and applying for a loan takes a lot of time. The process of disbursement of the personal loan takes a minimum time of a week. Unsecured loans are the quickest and can be disbursed in a day. Less legal formalities and high fees are certain issues in personal loans from banks. Unsecured loans are very convenient and can be given to those borrowers who are unable to get loans from banks due to bad credit score.
- For urgent problems- Life is uncertain. When problems catch you suddenly, you have no solutions to ask from family, friends, colleagues and workplace. Unsecured loans are secure and give you funds as much as you need in a few hours. You can access websites offering unsecured loans and offering the complete process online. Various lenders offer you different rates of interest depending upon your credibility and amount of funds.
- True information and transparent process – Complete true information is given to the borrowers. No hidden fee is charged from the borrowers. The process is for a day and there are no hassles for the borrowers. The borrower is in direct contact with the lender that maintains transparency.
- Bad credit in statements – 40 % people have bad credit issues. There are great problems of liquidity and poor savings. Many people in the country have filed for bankruptcy that has led to the increase in availability of unsecured loans.