Unsecured loans are also known as signature loans because the bank has nothing but your signature. They can't take possession of your house, car, or other belongings.

Ashington, UK -- (SBWire) -- 08/20/2013 --An unsecured loan is the one which is acquired without the use of any property as collateral for the loan. They are 'unsecured' because the bank has nothing to go after if you are not able to pay back.

Unsecured loans are also known as signature loans because the bank has nothing but your signature. They can't take possession of your house, car, or other belongings.

These types of loan are easy to apply because they are not based on the credit rating of the borrower. Unsecured loans UK bad are the best for the borrower’s who need the money immediately. These are issued in a period of 2 or 3 days as there is no credit check involved in the process.

As it is easy to obtain the loan, in the same way it is easy to repay it. The repayment schedule is flexible and is made according to the borrower. The installments to be paid are prepared keeping in mind the borrower’s income so that he can pay them without any worries. The longer the loan repayment period, the smaller will be the amount of each installment. Unsecured loans meet a borrower’s needs effectively and efficiently without becoming a burden on them.

These loans are bigger risks for the lenders because an unsecured loan is not obtained with the use of any type of property and typically have higher interest rates than secured loans. The interest on an unsecured loan is not tax deductible. Be aware that there is more risk to the bank, so the interest rates on unsecured loans are typically higher.

An unsecured loan may be a good option for individuals who do not have enough equity in their homes to be approved for a home equity loan. For people who don't have any collateral to pledge, an unsecured loan can be attractive. Unsecured loans are often more expensive and less flexible than secured loans, but suitable if the lender wants a short-term loan (one to five years).

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Unsecured loans are often acquired by borrowers for small purchases such as computers, home improvements, vacations or unexpected outlays. In an unsecured loan, the lender relies on the borrower's promise to pay it back. Due to the high risk involved, interest rates for this type of loans tend to be higher.