Unsecured Loans
An unsecured loan is one way to get some money if you’re short on funds. It might not be the best way, however. Be sure to fully understand unsecured loans before you move forward.
Unsecured loans differ from mortgages or home equity loans. There is no property used as collateral for the loan. This makes the loan a bigger risk for the lender. Although that is the key characteristic of a personal loan, there are others.
Characteristics of an unsecured loan
- No collateral. An unsecured loan is not guaranteed by any kind of property, such as a home.
- Interest rates. Interest rates for unsecured loans are higher than secured loans (such as a mortgage or home equity loan), but are lower than most credit card rates.
- Fixed terms. An unsecured loan can be due at the end of a set term, in which case the interest rate is fixed.
- Revolving line of credit. Some unsecured loans can work as a revolving line of credit like a credit card. In this case the interest rate is variable.
- No tax benefits. The interest on an unsecured loan is not tax deductible.
If you do not own a home or do not have much home equity; an unsecured loan may be your best choice if you need a loan. An unsecured loan that has a fixed rate and term forces you to be disciplined and pay the loan off within the set time frame – unlike a credit card which tempts you to continue spending. Also, the interest rate on an unsecured loan is lower than most credit card rates, although the credit card’s initial teaser rate may be lower.
Unsecured Loan Uses
- An unexpected tax bill
- College Tuition
- Medical Bills
- Home Improvements
- Credit Card Debts
- Vacations
Whether you are searching for medical bills relief or credit card debt relief, the National Debt Relief Group can help you find the right solution with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.