Everybody is not that fortunate to pledge security against the loan amount when financial adversity knocks the door. There are tenants, students, salaried personals who do not own a home, commercial property or valuables like car, jewellery etc. It does not mean that these people will remain deprived of opportunities at the time of financial deficit. To help these people, non secured loans have come into existence. To make the loan availability easy, these loans have excluded the security pledging clause.
It is a fact that non secured loans offer lower loan amount at higher rate of interest. The loan amount also needs to be repaid with in a shorter time period. These hard conditions are due to the exclusion of security pledging clause. But this clause is also a blessing in disguise. As no security is pledged, there is no need of property valuation. It means the paperwork related to the loan processing becomes minimal and the loan is approved fast. The second advantage is the absence of repossession clause. So, the homeowners who are reluctant to risk their home can apply for these loans.Your credit rating plays a vital role for approval of non secured loans as they are not backed by any collateral.
However, it does not mean that bad credit borrowers are debarred from the loan opportunity. If they can prove the repayment capacity, lenders offer them non secured loans at a higher rate of interest. There are scores of lenders offering the non secured loans. Hence, you are advised to perform proper search and comparison before availing the non secured loans.