Personal loans are typically given either as secured loans
or unsecured loans. Unsecured loans are a good way to get
cash fast to pay off debts, go on a holiday, or make a major
purchase for your home. Technically, a personal loan cannot
be used for business purposes; for that you should look into
an unsecured business loan instead.
Characteristics of Unsecured Loans
An unsecured loan is called “unsecured” because the lender
does not require the borrower to put up any kind of collateral.
In a secured loan, the lender must offer their home, auto,
or other valuable property as collateral for the loan. If
the borrower defaults, the lender takes possession of the
collateral in order to recover their money.
In an unsecured loan, the lender essentially relies upon
the borrower's word that he or she will pay the loan back.
In order to get an unsecured loan with reasonable terms,
therefore, it is better for the borrower to have a decent
credit rating. However, some lenders will give an unsecured
loan to individuals with bad credit, but the terms of the
loan will not be as favorable.
Now for Unsecured Loans