Apply for a loan of up to £25,000*
Get Your Cash!
Unsecured Loans UK
Big loan amount, no security required – how does it sound? For many borrowers, this kind of loan option is just too good to be true and fortunately, it exists. Known as an unsecured loan, this type of loan is offered in small or big amount. It doesn’t require the borrower to surrender collateral as a security against the loan. Its online version made the loan very accessible and convenient, thus, it’s well known in the lending industry.
Because of the numerous benefits it gives, many loan seekers are in favor of unsecured loans UK. The ease and simplicity of its requirements provide a good relief during a financial struggle. Basically, the loan is intended for people who have no asset to pledge. In other words, the borrower has no car, home, gadget, or stocks to give up to safeguard the loan. Because of this, the loan has become attractive to tenants and even homeowners who don’t want to put their properties at risk.
An unsecured loan is a type of personal loan that doesn’t give any lender a claim on loan seeker’s asset. However, to protect the given loan amount, the lender will require the borrower to provide a proof of income. This way, he can show his ability to repay the loan back on time. Apart from the income, a high-interest rate is charged to the loan.
Why Unsecured Loans Carry High-Interest Rate?
With a secured loan, the lender is confident that he will get the money back because of the collateral pledged by the borrower. In case of default, the lender can repossess the property, sell it, and use it as a payment for the unpaid loan. On the other hand, unsecured loans have nothing to provide, therefore, the lender will not have anything to acquire if payments are not made anymore. Therefore, to compensate the loan, high-interest charges are given as well.
What Are The Advantages Of Unsecured Loans?
- Almost anyone is qualified for the loan, providing that they have a stable source of income; therefore, the loan is very accessible even without any assets.
- Since there’s no collateral involved, the borrower will not risk losing any of his valuable items – like a car, phone, house, etc – however, the lender might take legal actions against the borrower.
- For consumers who need a little amount, unsecured loans UK are one of the best options to consider.
What Are The Disadvantages Of Unsecured Loans?
- The obvious one – high-interest rate.
- Some lenders may look for difficult criteria to avail the loan, such as a high income and a good credit rating.
- The loan’s maturity is usually shorter than the other type. Also, the loan amount is smaller to lessen the risk in case the loan seeker chooses to seize paying the loan.
Every loan has its own advantages and disadvantages and it is up to the borrower on what type of loan option to choose. Nevertheless, be sure to consider your capabilities to ensure that you can repay on time. Late payments, arrears, and defaults will accumulate bad credit rating and as a result, you may have a hard time applying for a new credit line in the future.
Our Lending Panel
We have relationships with the best institutions in the financial market, so we can bring you the highest quality loans around.