An unsecured loan or cash advance is a small loan that is always available. This is one of the two most popular options for short-term lending available to people, and the other is a payday loan. You do not need a credit tag to apply for an unsecured loan. Your bank may send you cash or a lender may be standing on your behalf if the guarantor fails. Such loans are repaid in monthly installments.
They carry very high interest rates, especially payday loans. Unsecured loans aren’t too bad and have an APR of less than 50%. The amount lent depends on the lender, but does not exceed thousands of pounds. Unsecured loans will only be repaid last after the other fees in the account have been paid. Unsecured loans are not secured by assets such as homes and cars. It is based on a panel of lenders who help you find the best loan for your requirements. Companies offer these various loans, secured or unsecured, depending on their requirements.
Different lenders will charge different APRs. This should appear in your ad as a representative APR. This includes all other charges, including interest. Of course, the rates will vary based on the customer’s profile, credit rating, and lender’s policy. Therefore, APR is in the single digit to 90’s range.
Some FAQs about unsecured loans …
Can I face legal action if I do not repay the loan?
Unsecured loans are completely legal and you may face legal action if you do not repay, even if you do not have a guarantor or asset associated with the loan.
What are the strengths and weaknesses of unsecured loans?
The advantage is that it’s easily available if you need a lot of cash in a hurry. No questions asked, payment terms are flexible from 1 to 5 years. There is no prepaid penalty and some loans have a repayment leave period for the first few months after the loan is taken.
The main drawback is that it is an expensive loan to repay.
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