An unsecured loan is a product which is sometimes called signature loan, payday advances or fast cash loans. They don’t require collateral and is based solely on your credit rating or the chance that you will be able to repay the debt. This means you will not have to put up anything valuable such as your car or jewelries to back up the loan. Banks typically want you to have anything that has value that they can hold in case you default on your loan. Thus, if you fail to pay them back, they will become the owner of these. While secured loans have a lower interest rate then unsecured ones, it can still be difficult for people with bad credit to find a bank that will lend them any money.
You will need a few things before you can take out one of these loans such as: proof of employment and proof of earnings, bank account, a valid ID, be a citizen of the state or country and should be over the age of 18. There may be other requirements, but these vary from company to company. You can apply for unsecured loans online and have the money transferred directly into your bank account if you are approved. Approval generally takes only a few minutes or up to a few hours, unlike bank loans which can take several days or a week to process.
While companies that grant unsecured loans are more concerned with your ability to pay the loan back rather than what you can put up to guarantee it, the interest rate can be very high, up to 400 percent. Some states have outlawed these loans because of the high interest rates and because some companies will let you extend your loan indefinitely and collect even more interest. These loans have their pros and cons so consumers are offered educational information that will not only assist with stabilizing debt and finances, but will also guide them in choosing intelligent avenues when looking to obtain some fast cash.