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29
Sep
Unsecured Loans: Answering Common Questions
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Needing money right now is a common predicament for many, many people. There seems to be no end to the economic troubles we are facing and many people struggle to pay bills each month that were once easy to cover. Finding, say $20, 000 would help a lot in terms of meeting these obligations, but with the recent bust of the housing bubble, it no longer seems wise to leverage one’s home in a collateral-backed secured loan. If something should prevent the loan’s repayment you would be both homeless and broke. This is why looking for an unsecured loan is a far better option. The following will answer several common questions about unsecured loans on the market today.

Are Unsecured Loans Hard to Get?

Many people worry that the security offered by unsecured loans will make them difficult to acquire. However, if you have a good credit score there are actually many private lenders who will be happy to help you obtain up to $20, 000 in an unsecured loan.

Those with poor credit will generally have a harder time qualifying for these loans alone, but the option of a cosigner can solve many of these problems. This way the income of both individuals as well as the credit score of the cosigner can be taken into consideration and will generally result in a lower interest and easier terms.

What Can You Do with an Unsecured Loan?

There is literally no limit to the possibilities when it comes to these loans. They are personal in nature which means that the reason for taking an unsecured loan can range from paying for wedding expenses to consolidating debt to fixing your car.

Also called “signature loans” the rules for unsecured personal loans basically only require you to provide a “signature” and a credit score to gain approval for up to $20, 000.

What about Repayment?

This is the final consideration that you need to make in taking an unsecured loan. Repaying the money that you borrow can be done in several ways. Loans with longer terms (up to six years) will have lower monthly payments, but cost more in the long run as there is more opportunity for interest to accumulate. Taking a shorter term will cost less in the overall scheme of things, but result in a higher monthly bill. Which route you take is a personal decision that should be based on your monthly budget and current income.

How Do You Get the Loan You Need?

Once you have decided to take an unsecured loan, the next step is to find a lender who can work with you. There are many options available online today and most of them specialize in unsecured lending. It is important to make sure to check out several different lenders and compare their rates, fees, terms and conditions. Keep your search to a concentrated period of time, however, since sustained and frequent checks on your credit can result in a lower overall FICO score.

Deciding to take an unsecured personal loan is a big move for any borrower. The good news is that there are several lenders online who can get you up to $20, 000 and help you on your way to financial happiness and freedom.