Loans can be broadly classified as Secured Loans and Unsecured Loans. A Secured Loan is a type of loan which is attached with collateral. In a Secured Loan, the borrower is required to offer collateral to the lender. In contrast an Unsecured Loan doesn't require any collateral against the loan taken. Because of this feature, an Unsecured Loan acts as the best solution for tenants who are not in a position to offer collateral to secure a loan.
Unsecured Loans are not only restricted to tenants only. Unsecured Loans can be availed by homeowners also who do not want to offer any collateral against the loan taken. According to recent statistics, a major increase has been seen in the number of borrowers applying for Unsecured Loans. With an Unsecured Loan, the borrowers are not required to place their home, their property or any other substantial possessions as security for the loan amount.
Unlike Secured Loans, an Unsecured Loan borrower does not offer any guarantee of repayment to the lender. So, an Unsecured Loan lender faces more risk as compared to secured ones. That's the reason an Unsecured Loan lender charges comparatively higher rate of interest to compensate the risk.
An Unsecured Loan enables you to borrow as low as £500 and as high as £25,000. The repayment period might range from anywhere between six months and ten years. However, it should be kept in mind that the rates and terms for Unsecured Loans vary a great deal from lender to lender.
One of the major benefits associated with Unsecured Loans is its speedy approval process. So, Unsecured Loans acts as the best rescue when you need cash fast. Unsecured Loans can be used for a wide variety of reasons, such as, home improvements, holidays, debt consolidation etc.
There are many sources available to help you access some of the best Unsecured Loans. So, make sure to explore all the sources. Educate yourself with the terms and policies of the lending market. This will help you to secure the best Unsecured Loan deal.