Unsecured personal loans
Unsecured personal loans are personal loans designed to be undertaken without the need to secure the loans against collateral, such as a property or a car. This makes unsecured personal loans ideal for people who do not own their own home and for people who have no other type of collateral to secure personal loans against.
The extent of borrowing
The extent of borrowing on unsecured personal loans is generally less than on secured personal loans, and the APR on unsecured loans is often higher than on secured personal loans. But, having said this, unsecured loans of up to £25,000 are possible from some personal loan companies. You can also obtain personal loans with repayment terms on unsecured borrowing of up to 10 years and an APR of between 5.5% and 8% on unsecured loans.
Who qualifies for unsecured personal loans?
Unsecured personal loans have a wider reach than secured personal loans. Both tenants and homeowners can take out unsecured loans, as well as young people who have no verifiable personal credit history. Additionally, unlike secured personal loans, unsecured loans are also open to people who have a poor credit record. If you have a record of defaulted mortgage payments, arrears on other loan payments, or have CCJs filed on your personal credit record, making you ineligible for secured personal loans, then personal unsecured loans may be for you.
How to successfully apply for personal unsecured loans?
To successfully apply for personal unsecured loans, the applicant for the unsecured loan must have a regular source of income. Proof of income from the unsecured loan application is likely to be requested by the personal loan companies, and many loan companies will also carry out background checks on other loans, secured or unsecured, that the personal loans applicant holds now or has held in the past. Personal unsecured loans applicants who have been resident at the same personal address for more than three years and personal unsecured loans applicants who are married and have stable employment are those most likely to be successful in obtaining personal unsecured loans.
For homeowners, personal unsecured loans are ideal
For homeowners, personal unsecured loans are ideal should the homeowner not have personal loans officially secured against their property. The most successful applicants for unsecured loans in these cases are people who have equity in their property and no other unsecured loans. Above all else, these factors will help the homeowner applicant acquire unsecured loans, even if the homeowner has a bad personal credit history.
Loans companies offering unsecured borrowing, in general, do not limit what the funds from unsecured loans can be used for, so long as the person taking out the personal unsecured loans does not use the unsecured loans funds for illegal purposes. With unsecured loans, the sky really is the limit!