Author: Andrew Burman Added: August 29, 2008
When you need some instant money for things that suddenly pop up like expensive bills, unexpected hospital trips, university fees or anything that needs a few thousand dollars, then an unsecured personal loan can be ideal. An unsecured loan means you do not have to have any assets that can be placed as security in the loan contract should you not be able to pay back the loan; the criteria for approval is based on your credit rating instead. So an unsecured loan is an ideal choice for people who do not have a car or other valuables that could be used as security. As you are not putting up any assets for security your unsecured loan approval will depend on your credit rating. Your credit rating is based on your current income, as well as previous loans that you have paid back and credit that you have paid back. Clear your outstanding loans and credit before you apply for an unsecured loan, otherwise you will find it difficult to get approval when applying. Before applying for a loan or credit you must have a plan on how much you are going to spend and how much you can realisitically pay back because if you cannot or stuggle to pay them back it will affect your future borrowing applications negatively. Each loan agreement is different. The maximum that can be borrowed depends on the lender, it can be up to $75,000 in some cases. The repayment time of the loan depends on your contract but it can range from 6 months to 10 years. Unsecured loans are a bit more risky for the lender so the interest rates are usually higher than secured loans. As there are no assets to value it makes the application process faster so that is why it can be a quick way to get instant money. Depending on which lender you go with some lenders will offer you are fixed or variable interest rate. A fixed rate means the interest rate never changes even if their interest rate offer to other people goes up or down which is what the variable optoin does. Make sure that before you apply you have no outstanding loans and have a good repayment history (such as paying loans of quickly) as well as having a regular income for at least 3 months, the longer the better. There are a lot of websites that let you compare unsecured loans from various lenders just a do a search on google for 'compare unsecured loans' and you should be able to find a few of these websites.
--- Andrew writes for a few Australian websites in the field of Finance. If you are looking for personal finance this is an excellent website
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