Easy Unsecured Loans for Individuals and Businesses
Obtaining a loan isn’t always easy, especially when that loan is unsecured and therefore more of a risk for lenders. In order to make the process of getting a loan as simple as possible, it helps to understand the difference between unsecured and secured loans and the requirements for each.
Unsecured Loans vs. Secured Loans
Unsecured loans—such as credit cards, medical bills and student loans—are loans that are not tied to collateral. Because unsecured loans do not require collateral, they aren’t typically easy to obtain, and individuals and businesses alike will need both a good credit history and solid income to be approved. However, if your credit history is good and your income steady, you might be able to easily qualify for an unsecured loan and quickly get the funds you need.
Pros of Unsecured Loans:
- Can often be obtained quickly
- No danger of losing collateral such as a house or car
- Benefits offered with unsecured credit cards
Cons of Unsecured Loans:
- Higher interest rates
- Harder to qualify for
As mentioned before, secured loans require collateral to be obtained. Types of secured loans include home loans, car loans, secured personal loans and secured credit cards. Secured loans are typically easier to qualify for because they are less risk for lenders and they often have lower interest rates.
Pros of Secured Loans:
- Easier to obtain
- Can borrow larger amounts
- Lower interest rates
Cons of secured loans:
- Loss of collateral if default on loan
Is an Unsecured Loan Right for Me?
If you need funds quickly, don’t want to put up collateral for a loan and don’t mind higher interest rates, an unsecured loan could be right for you. Whether you are looking for a loan for personal or commercial use, it is important to go over the pros and cons and view your options before you apply.