Unsecured Personal Loans
What is an unsecured loan?
When you take out an unsecured loan, you don’t have to have any sort of collateral. The lender is letting you borrow money in exchange for a promissory note that states you’ll pay the money back.
You’ll be asked to fill out an application telling the lender how much money you need, and if you’re approved, you can get it in cash in as little as a single business day.
You’ll be asked to repay the loan in a set amount of time and to pay interest or some fee on the amount you borrow.
Unsecured loan requirements
The requirements for getting an unsecured loan can be strict because your lender doesn’t have any way to guarantee that you’ll repay what you owe.
Because of this, you generally won’t be able to borrow large sums of money. Plus, the fees are usually high because the risk to the lender is greater.
The advantage is that you won’t have to put up any collateral, so there is no risk to you personally. This means that despite higher fees and a stringent approval process, an unsecured loan is actually a great deal for many people.
How to apply for an unsecured loan
To apply for an unsecured loan with a bank, you’ll often need to have good credit and proof of income. If not, your bank may ask you to take out a secured loan instead.
Difference between secured and unsecured loans
As we just discussed, unsecured loans are a sound option for many people because you don’t risk losing your personal assets if you’re not able to pay your loan back.
However, if you have bad credit or you need more money than you can get through an unsecured personal loan, you may be left with no option but to take out a secured loan.
Secured loans include car loans and home loans, where there is something of value attached to the loan. There are also secured personal loans. For this type of loan, you’ll be asked to put up something of value to serve as collateral.
Generally, this will need to be an asset that is worth more than the amount you wish to borrow. For many people, this will be the title to their cars, but your lender may consider other assets.
Unsecured loans for bad credit
So, what do you do if you need a loan, have bad credit, and don’t have any assets that you can use as collateral?
Good question. There are now lenders who provide small, unsecured loans to those in need. LendUp is one such lender, and we’re here to help.
Unsecured loans online from LendUp
When you get an unsecured loan through LendUp, you are starting a relationship. Each time you successfully repay a loan with us, you develop that bond further.
Over time, you can move up the LendUp Ladder (where available) and earn the ability to borrow more or pay less in fees and interest. Where available, you may even use the Ladder as a potential tool to rebuild your credit.
LendUp can help you get cash fast to cover necessary short-term expenses, and we can be your backup as you work to improve your financial health. We provide a helping hand if you need us.
Contact us to learn more.
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