With an unsecured loan, you can obtain credit without any security and enjoy a range of benefits as well as peace of mind.

There are also negative aspects to unsecured loans which we will talk about and consider in this article to ensure you weigh up all the pros and cons before committing.

Types of unsecured loans

There are a wide range of unsecured loan types and these include credit cards and other revolving lines of credit, payday loans, short-term loans, personal loans, student loans and some bad credit loans.

What is an unsecured loan?

When you apply for an unsecured loan you do not need to put up any security. This means that your house, car, and valuables will be safe. There are many lenders that will let you apply online for an unsecured loan.

This loan is easy to apply for and you won’t pay much more than any other loan in terms of interest as long as you have a good or excellent credit rating.

Unsecured loan amounts can be paid out within an hour of approval. And you will be happy to know that you will only wait a few minutes for the loan approval you are looking for if you’re applying for a quick cash loan!

Quick unsecured online loan applications

The best way to apply for an unsecured loan is to apply online. There are many sites that are available for you to apply to and the best part is that it will not even take up that much time.

Online loan applications take a lot of pressure and work off of the customer and reduce the loan application times significantly. You can complete the loan application online as well as upload any required supporting documents without having to print or scan a single sheet of paper.

Most of the companies will contact you via phone or email and they will let you know whether you will qualify or not for the loan. The process is done with a few simple steps and you will get an almost immediate answer from the lender. It could not be easier than that!

Remember that part of the loan application process is for the lender to run a credit check on you. This is a legal requirement just as ensuring affordability is. If the lender finds that you have poor credit, are experiencing financial difficulty or cannot afford the loan repayment, the law requires them to decline your application.

That being said, different lenders have different minimum requirements and you may very well find that you can still get a loan with a n alternative or bad credit lender even after being denied a loan from a mainstream lender or bank.

Compare loans to get the best offer out there!

On most of the loan comparison sites, you will be able to see how much you can apply for when you look at the quotes section. A loan calculator will show you the cost of your loan as well as the added interest and fees.

This works by entering your desired loan amount and favourable repayment terms. The calculator will do the rest. The biggest benefit of this loan comparison method is to inform you about the total cost of your loan, helping you to budget for monthly repayments.

In addition to looking for the best interest rates on offer you need to consider other fees and charges which are typically unique to each lender. These may be service fees and once off loan application fees.

Finally, it my be a good idea to find out what the lender’s policy is regarding early loan settlement. If you anticipate repaying your loan early, ensure you go with a lender that charges no early loan repayment fees.

Unsecured loans mean no collateral is needed

A big benefit that comes alongside an unsecured loan is the fact that you can take out this loan without having to put up any of your valuables as security.

With an unsecured loan, you can get an affordable loan and still get the loan amount that you need. The amount you can qualify for will be decided when companies look at your credit profile. A better credit record can get you a higher amount or more favorable interest rates, but this does not mean you can’t apply for a bad credit loan.

Why choose an unsecured loan option?

As soon as you have filled in the online loan application the lender will get back to you with the outcome of your loan. Many lenders will payout your loan on the very same day as the loan application.

If you have been declined you can always try another lender. When you take out an unsecured loan and make the payments as you are supposed to, this can raise your credit score and help you get better deals on loans in the future.

When an unsecured loan is not an option:

  • When purchasing a home or property
  • When looking to purchase a vehicle
  • When looking for a large sum of money
  • When you have bad credit and do not qualify for an unsecured loan

You should also remember that there are some negative aspects that an unsecured loan will bring. This includes a loan limit, as you will be able to take out only a smaller loan as well as a higher interest rate as the lender will not be able to recover their money in the event of a default.

Get the best deals on your loan

Overall an unsecured loan is a good loan option, they are affordable and there are many lenders offering this loan option. This makes it easy to do loan comparisons and choose the best option for you.

There are a few unsecured loan options available to you. To make it easier, use a loan comparison site to ensure you get the very best deal on your loan offer. A loan comparison site will allow you to compare loan amounts on offer, interest rates, fees, early repayment penalties and other requirements.