What are Unsecured Personal Loans?
Many times we need money for personal uses such as paying for our children´s education. Going on a vacation or improvements on the home. You can borrow a small amount of money from the bank for these purposes as well. Since these loans aren’t large enough to be secured by one of your assets, they are known as Unsecured Personal Loans. Here’s everything you need to know about an unsecured personal loan and the process of applying for it. Read More >>
How to apply for unsecured personal loans
Small personal loans not protected by any assets you own is known as an unsecured personal loan. The loan is usually evaluated on whether the borrower has the assets valuable enough to pay for the loan. Thus, the loan heavily depends on the borrower’s history and their credit score. This determines their ability to pay back the loan.
An unsecured loan can vary anywhere between £500 and £25000 and is given at a fixed rate by the bank or the lender. The % APR of this loan is decided by the amount of risk the lender faces by giving out the money. The loan is set for a fixed period of time and is required to be paid back in the given time frame only. However, if the borrower is unable to pay back the amount, they may face some additional charges on the loan. As well as being sued for a trial in the small courts. The court also has the power to make you pay for all the costs. As well as sell your assets and declare you bankrupt for the repayment.
Reasons for applying
Things for which you can get unsecured personal loans. Renovations at home: Some improvements in your home space like getting a room painted, buy new furniture, renovation of the house, etc. can be achieved with a small loan.
Vacations. Your dream vacation becomes extremely affordable with a little help in the form of unsecured loan. Unsecured loans can be very helpful in these cases as they are set at a fixed rate and for a set period of time.
Car Upgrades. Getting a new car or upgrading an old one can be achieved with unsecured personal loans.
Or Learning something new. If you want to go for skydiving classes, or learn something where the classes might seem unaffordable. An unsecured loan can be the effective way to go.
Things that help in getting the loan
Good credit ratings. Unsecured loans possess the biggest risk to the lenders as they do not include the security of an asset. Thus, good credit ratings built over a period of time along with good financial management background helps with the loan approval.
Job security. Financial security and having a job helps with your chances of getting the loan.
Good relationship with the bank. Existing customers usually have no difficulty in attaining personal loans.
How to know if you’re eligible?
There are a certain criteria one must fulfil in order to obtain unsecured personal loans.
You have been a permanent UK resident for at least 3 years.
That you are aged between 23 and 70 years of age.
Are not unemployed and have an annual income of at least £12000.
You have a current account at the bank and have a good credit score.
Finally for the unsecured personal loans
Applying for a personal unsecured loan is easy and the formalities can get completed in as less as 10 minutes. All you need to fill out are the account details where the loan money should be transferred. Your personal details and address, income, and employer details. Depending on this and the Calculated % APR. You will be granted your personal unsecured loan in no time at all.