Loans Fiesta (Planning your finances effectively) Problem getting a Loan?
Home About Us FAQ's Articles Services Resources Contact Us
  Other Loans
Loans for Unemployed
Wedding Loans
Education Loans
Bridging Loans
Home Equity Loans
  Other Loans
Christmas loans
Loans for doctors
Best Secured Loans
Logbook Loans
Provident Loans
Country UK   USA
First Name*
Last Name*
Date Of Birth
Tel No*
Mobile No
Email
Address*
Postcode*
Purpose*
Loan Amount*
Status
I have read & accept the DPA Statement
We offers great plans for every budget
How to Apply?
Cheap Unsecured Loan – ensure low cost loan without risk
Where to Search for Low Rate Unsecured Loan

 

Unsecured Loans – Substituting Secured Loans

By Andrew Baker

Watching more and more people fall in the trap laid down by the secured loans, you resolved never to take debt help from the lending organisations. Nevertheless, as and when need arises, the lending organisations do have to be approached for help. With the many changes that have taken place in the lending scenario in the UK, you do not have secured loans as the only option available. Unsecured loans have made their mark as loans that are easily available from lenders at attractive rates and flexible terms.

With more and more people losing their homes to the lending organisations, the aversion to secured loans has grown. Unsecured loans have gained from this aversion to secured loans. These loans provide resources to the borrowers without requiring them to offer their homes as collateral. This frees up the equity in home to be used for other purposes.

The high rate of interest that is charged on these loans is admissible. By offering loans to people without any security, lenders are putting their funds to risk. The higher rate counter-weighs the higher degree of risk involved. Lenders however, make their assurances regarding the credit behaviour of the borrower through the borrower’s bank, and other organisations with which the borrower deals.

A good credit history is a prerequisite for unsecured loans. A bad remark on the credit file may dither many lenders in the UK from offering loans to such borrowers. Lenders undertake credit scoring to be on the safer side. Credit scoring is the method through which lenders assess the credit worthiness of a borrower. The borrower is asked to answer a few questions in the application form. The answers to these questions form the basis of the points that are allotted to a borrower. If the mark obtained by a person is above the set mark, he is accepted for being offered unsecured loans.

If he fails to cross the mark, he may either not be offered the loan or may have to shell a higher amount in the form of interest. The borrower may not get the desired amount and have to make do with the smaller amount. However, this does not give a generalised view of all the lenders. Each lender follows a different method of credit scoring. Thus, failure to qualify with one lender does not mean an end to the loan hunt. There may be other lenders who are ready to supple their terms to include the borrower.

Tenants and other homeless people constitute a major group of borrowers of unsecured loans in the UK. However, they are not as fortunate as their counterparts with homes. While tenants have to choose unsecured loans as the only option available, those with homes turn down secured loan offers in order to save their homes. Tenants may however have to be disappointed with some lenders since they make it necessary for the borrower to have a house, even though it is not accounted for the collateral purposes.

Unsecured loans are made available to people who are on income supports. Income support is an income related benefit normally available to people above 60 years of age. These are allowed to people who do not have enough income to meet their basic needs, or whose savings ranges from £8000 to £12000. Unsecured loans can be used by these people for a variety of purposes. The amount received through income supports will be used to repay the monthly instalments.

Unsecured loans are like regular loans in the other aspects. The process starts with the borrower requesting help through the application. The mode of application may be different for different people. Online applications rule the roost, with majority of the customers choosing the online method. Next comes the telephonic applications. However, the absence of any written record makes them less popular. Lastly, borrowers may choose to personally visit the lender and make the application. This has become tedious now because of the number of lenders in the UK increasing appreciably.

Work on the application starts immediately. Lenders search for the various offers available with them and with partner lenders. The lender offering a faster approval is more preferred. Unsecured loans are customarily approved faster than the secured loans. Most of the time that is taken in approving the secured loans goes in valuing the property. Since no collateral is required, there is no need for property valuation. Thus, unsecured loans are made available to borrowers promptly.

Unsecured loans have gradually made a place as a source of finance. Lenders, no longer consider unsecured loan borrowers with distaste. Lucrative deals are offered to people going for unsecured loans. They are now being used in all areas that earlier secured loans used to cater. Debt settlement, real estate purchase, and car purchase are some of the uses that borrowers put the loan amount to. Thus, unsecured loans have proved a better alternative to the secured loans.

Summary

The constant fear that accompanies secured loans vis-à-vis the repossession of the homes is done away with in an unsecured loan. The lender offers assistance without the demand for the title to the home. These attract a higher rate of interest. Tenants and people with income supports too are able to avail assistance through unsecured loans. Read more about unsecured loans in this article.

Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the personal loan web site http://www.loansfiesta.co.uk for any type of uk secured loans and unsecured loan please visit
http://www.loansfiesta.co.uk


 
UK Loans

Loan Bedfordshire | Berkshire | Loan Buckinghamshire | Loan Cambridgeshire | Loan Cheshire | Loan Cornwall | Loan Cumberland | Loan Derbyshire | Loan Devon | Loan Dorset | Loan Durham | Loan Essex | Loan Hampshire | Loan Herefordshire | Loan Hertfordshire | Loan Huntingdonshire | Loan Kent | Loan Lancashire | Loan Leicestershire | Loan Lincolnshire | Loan Middlesex | Loan Norfolk | Loan Northamptonshire | Loan Northumberland | Loan Nottinghamshire | Loan Oxfordshire | Loan Rutland | Loan Shropshire | Loan Somerset | Loan Staffordshire | Suffolk | Loan Surrey | Loan Sussex | Loan Warwickshire | Loan Wiltshire | Loan Worcestershire | Loan Yorkshire | Loan Anglesey | Loan Brecknockshire | Loan Caernafonshire | Loan Carmarthenshire | Loan Cardiganshire | Loan Denbighshire | Loan Flintshire | Loan Glamorgan | Loan Merioneth | Loan Monmouthshire | Loan Montgomeryshire | Loan Pembrokeshire | Loan Radnorshire | Loan Aberdeenshire | Loan Angus | Loan Argyllshire | Loan Ayrshire | Loan Banffshire | Loan Berwickshire | Loan Buteshire | Loan Cromartyshire | Loan Caithness | Loan Clackmannanshire | Loan Dumfriesshire | Loan Dunbartonshire | Loan East Lothian | Loan Fife | Loan Vernesshire | Loan Kinross-Shire | Loan Kirkcudbrightshire | Loan Lanarkshire | Loan Midlothian | Loan Morayshire | Loan Nairnshire | Loan Orkney | Loan Peeblesshire | Loan Perthshire | Loan Renfrewshire | Loan Ross-shire | Loan Roxburghshire | Loan Selkirkshire | Loan Shetland | Loan Stirlingshire | Loan Sutherland | Loan West Lothian | Loan Wigtownshire

Visitors to this website are advised that loansfiesta DOES NOT deal in Mortgages or Remortgages. We only offer unsecured loans and secured loans (as second charge).

© copyright 2005-2006, Designed & Developed by loansfiesta.co.uk Terms & Conditions | Privacy Policy | Sitemap
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A
MORTGAGE OR ANY OTHER DEBT SECURED ON IT

A fee between 0% and 10% of the loan may be charged on some plans
depending on credit history and ability to prove income.
Example: Loan of £15,000: 120 monthly repayments of £204.66, 10.4%APR variable
Loans secured on residential property.