As a person getting a personal loan, you might be confused about the type of loan you should apply for. It is essential to understand that there are different types of loans, each of which has its own benefits. For example, some people prefer secured loans, while others go for unsecured personal loans.
This article explains some benefits of applying for a personal loan with no collateral.
No risk of losing your property
The primary advantage of unsecured personal loans is that you don’t have to pledge any collateral. This means that you are free from the risk of losing your property if you fail to repay your loan on time. In case you have a bad credit history, it’s also possible for you to get a loan without pledging any collateral.
Quick and easy availability
Unsecured personal loans offer you the ability to get a loan quickly and easily. This is because this type of loan does not require collateral, which means that the lender does not need to take an asset from you if you fail to repay the loan. However, the lenders will have no problem approving your unsecured personal loan application if they think you can afford it.
Pre-approval is available for any loan amount up to $100,000, and approval can be done within 24 hours of applying for one online or over the phone. The best part about applying for an unsecured personal loan is that no credit checks are required! This means that those who may have had trouble getting approved due to bad credit should consider this option. There are no restrictions on how much money can be borrowed as long as applicants meet specific requirements set by lenders, such as age and employment status.
If you want to take a loan for any personal use, you can opt for an unsecured personal loan. This is because it does not require any collateral attached to the loan amount. However, it also has low-interest rates compared to other types of loans.
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You can avail of an unsecured loan at a lower rate than secured ones as there is no security required for this type of loan. Also, fewer formalities are involved in applying for an unsecured personal loan than a secured one.
Flexible repayment tenure
Most personal loans have flexible repayment tenure, allowing you to pay off your loan quickly. This is because the tenure can be between 1 and 7 years, depending on your loan amount and credit score. The longer the repayment period, the higher your interest rate will also be.
No collateral required
One of the most significant benefits of an unsecured personal loan is that you don’t have to pledge any property as security against your loan. However, you can avail of this type of loan to meet various expenses, including medical bills, home improvement, travel and holiday expenses etc.
Also, “There isn’t one definitive score that is sure to get you an unsecured loan. Both FICO® and VantageScore credit scores range from 300 to 850, with anything over 800 considered excellent.” says Lantern by SoFi experts.
If you are looking for a quick personal loan without pledging any collateral or guarantor, then unsecured personal loans are the best option.
Now that you know about the benefits of unsecured personal loans, you should be able to decide whether or not this is the right option for you. If so, do your research and get the best deal possible!