- Loan

Who Needs Unsecured Loans Today?

It happens to a large percentage of people every year. It may be a medical emergency, unexpected repair to the home or car, or simply an unanticipated expense. Maybe the need for a new computer or back to school clothes just doesn’t fit into the budget. Suddenly, you are in the market for a loan. There is just one problem, you do not have anything to use as collateral. You are in the market for unsecured loans.


In the banking world, loans are generally secured by some type of collateral. Collateral can be your car for a car loan or a home in a mortgage. If, for some reason, the loan goes into default, and agreements can not be reached, the collateral is taken as a means of repaying the loan. In simple terms, the collateral guarantees the lender will be repaid in one form or another.

Unsecured loans are ideal for those that do not own their own home or have poor credit. By not using your home or other assets, these loans do not have any sort of security, making them a greater risk to the lender. The terms of these loans vary with repayment lasting anywhere from 6 months to 10 years.

The Cost

Unsecured loans are made without the guarantee, or any form of collateral. Due to the lack of a guarantee, these loans will cost a great deal more. To make up for the lack of collateral, lenders apply a much higher interest rate, anywhere from 5% to 30%, due to the much higher risk of loaning. Additionally, loan origination fees and convenience charges can add to the cost of taking such a loan. Average loan amounts range from £1,000.00 to £25,000.00.

It is important to insure that you can easily repay the loan amount. A number of problems may result in the failure to repay. Credit ratings tumble quickly when loans are not paid as to the agreements. Additionally, a number of extra fees can be applied to your loan in the event repayment is not compliant with the signed agreement.

Where To Look

A large number of lenders exist primarily to extend unsecured loans to those in need of funds without the ability to secure the loan. A quick search on the Internet can produce a number of quality lenders. A number of sites exist for the sole purpose of screening applicants and referring them to lenders. This method generally produces results quickly, with lenders contacting you in a matter of hours. Additionally, your local yellow pages may offer a few options in the event an Internet search does not produce results.

Unsecured loans are available to help those with no assets to use as a guarantee to the lender. The reasons for needing these loans are numerous. Those with no assets or poor credit can secure the needed funds by agreeing to high interest rates and additional charges that can be quite costly. In times of need, these loans are available and may just save your budget.