4 Reasons to Get an Unsecured Loan

iQuanti: If you need money quickly to cover a medical emergency or sudden car repair, you may be considering getting a loan. There are many loan options available, including those secured by collateral, like a title loan or auto loan, and those that are unsecured, like a personal loan or credit card. If you're not ready to use property to secure a loan, here are four great reasons to get an unsecured loan.

You can get money quickly

The process to get money with an unsecured loan is often relatively quick. If you're approved by an online lender for an unsecured loan, you may be able to access funds the same day you apply or within 24 hours. Plus, you may receive an eligibility decision in real time, meaning you won't need to sit around at the bank for hours only to find out you don't qualify.

There's no need to provide collateral

With secured loans, you need to provide an asset, like your car's title, as collateral. That collateral can then be taken by the lender if you fail to repay the loan.

When it comes to unsecured loans, the lender doesn't require collateral. That means if you fail to pay, you may face damage to your credit score, but you may not risk losing property in the process.

The loan can be used for any reason

There are typically no restrictions on unsecured personal loans like there can be on options like a car or home loan. Once approved, you're free to use the cash for any reason, whether that's doing a home renovation or paying off medical bills. As long as you pay back the loan in a timely manner on the agreed-upon terms, many lenders have no say in how you use the funds.

You may be approved with poor credit

If you're working to improve your credit score, you may still be eligible for an unsecured loan. Specific lenders may review your credit score but also consider income and existing debt. And to protect themselves, lenders may still be willing to issue you an unsecured loan, just for a smaller amount and with a slightly higher interest rate.

The bottom line

When you need cash fast, an unsecured loan is an option you may want to consider. With an unsecured loan, you can get money quickly without putting up collateral, you may be approved with below-average credit, and you won't be locked down to using the loan for a specific reason. But before you apply for an unsecured loan, be sure you have a solid repayment strategy. That way, you'll avoid unnecessary interest and fees.

Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.

Source: iQuanti, Inc.


Categories: Personal and Family Finances

Tags: financial services, loans, personal finance