An unsecured loan is a loan which a lender gives to you without asking for a security. This means that you need not pledge any property as security or collateral. Sounds good? However, getting unsecured loans is not everybody's want. There are a certain grounds you should stand good on to avail to unsecured loans. The primary criterion is an unblemished credit score. The rate of interest charged is based on mutual agreement between the lender and the borrower.
Unsecured loans can be used for any purpose, from urgent ones like paying tuition fees to going for a holiday or any other purpose. An unsecured loan comes as a big relief when you feel the need to consolidate multiple debts.
Unsecured loans are available as different schemes in the market:
- Credit Card Debt: When you use your credit card to make purchases, an interest is charged on it. Using your credit card creates a debt. This can treated as a form of an unsecured loan.
- Bank Overdrafts: When you take out more amounts from your account than available, a debt is created against your name. It means that the account provider is offering you credit. This is noted in a bank overdraft. This is a form of unsecured lending.
- Corporate Bonds: This bond issued by corporations entitles you to receive payoffs from them. And since, the yield is often high, in spite of certain risks. This form of unsecured loan can be a good deal.
Unsecured loans can be availed from different sources, like building societies, private lenders and the Internet. Of them all, for sheer convenience and choice, the online option is the best for unsecured loans.
Article Source: EzineArticles
1 comment:
Does anyone know what the situation would be for obtaining corporate surety bonds bonds as a sole-trader who has a poor credit history. I have looked into companies who offer bad credit surety bonds but I need to secure the bond against the performance of my business to my clients. To be honest I don't really understand all of the jargon as I am a new business owner who has never had to deal with this kind of thing before - but was informed by a relative that it's something I need to sort out. I don't really want to ask them since my finances are something I like to keep private.
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