Last month, we discussed what VAT loans are and how they work. This month we are continuing this series with a guide to unsecured loans.
An unsecured loan is a borrowing method where you receive a set financial sum from a bank or lender. As per the loan terms and conditions, you then make regular payments as agreed upon, doing so until you have paid back the loan – including interest – in full.
The application process for an unsecured loan is straightforward. Assuming you are a UK resident and aged 18 or over, you will be able to apply. However, this doesn’t necessarily mean the application will be successful.
Unsecured lenders will perform a full credit check and consider your regular income before deciding if the loan is appropriate. If they don’t feel confident in your ability to meet repayment terms, your application will be rejected.
Typically, an unsecured loan has a fixed interest rate. This rate is dependent on numerous factors, such as the lender, your credit history, and loan terms. Regarding the latter, an unsecured loan is usually set over a period of three to seven years. However, this can be much shorter – as with a payday loan – and often comes with a higher interest rate.
If your application is granted, the loan provider will deposit the funds into your bank account. Monthly loan repayments then begin immediately and continue until the debt is cleared.
When gathering more information about unsecured loans, it’s not unusual to come across another option: secured loans.
The main difference between the two loan types is that, with a secured loan, you have to back up your borrowing with a valuable asset or collateral, such as your car or home. This acts as a guarantee to the lender, meaning they can seize the asset in the event you’re unable to pay back the money you owe.
A secured loan is a suitable alternative if you have a substandard credit score or require a substantial sum of money.
Unsecured loans are popular for numerous reasons. In fact, there are several benefits gained from going the unsecured loan route.
Here are a few of the key advantages to consider:
Are you ready to apply for an unsecured loan and receive an instant cash injection? If so, you might be confused about what to do next. After all, there are countless lenders out there to choose from, and trying to find one that fits your specific needs and circumstances can be a challenge.
No matter how complex the loan landscape might be, TSF Finance has you covered. We can assist you with your application for an unsecured loan while making the process as smooth and easy as possible. We will match you to a lender that is right for your business, helping you obtain the funds you need quickly.
Contact us today for more information – our friendly and knowledgeable team is here to help.