An unsecured loan is not an 'unsafe' loan, but is just another word for a personal loan. Unlike a secured loan, this type of loan is not secured against your property or car – there is no collateral required. Unsecured loans are widely available in New Zealand and you can use the loan for any purpose, whether you want to pay for a dream holiday or carry out repairs in the home. Use the chart below to compare the main features of all unsecured loan. What do you need to provide in order to be eligible for the loan? Will you need a good credit rating or be minimum 18 years of age? Please make sure that you read the terms and conditions of any unsecured loan thoroughly to ensure you understant the product. If you are ready to apply, click on the More Info button.
Compare Unsecured Loans
Whatever your credit history you are likely to get approved for an unsecured loan.
What is an unsecured loan?
When you take out an unsecured loan you can borrow money without having to provide security against it. A secured loan is where you are required to put up an asset against the loan which is used as collateral which is usually your home or car. This makes unsecured loan a less risky option for borrowers because with a secured loan you risk having this asset seized should you miss payments. This can ultimately mean having your home repossessed. This won’t happen with an unsecured loan which is why they are popular.
Got a poor credit history?
Unsecured loan lenders will look at your credit rating when deciding on whether or not to approve you a loan. You will find that the better your credit rating the better loan conditions you will be offered. However, you will still be able to find unsecured loans whatever your credit rating. Payday loans and loans for people with bad credit are popular unsecured loans.
If you have a bad credit rating you will find that you will not be able to borrow as much if you had a good credit rating.
What are the cons?
The main drawback of an unsecured loan is that the interest rates are likely to be considerably higher. This is because unlike secured loans, lenders do not have the security of your asset should you default on the loan. This makes the loan a bigger risk for the lender.
Interest rates are also likely to be high because you will be able to find unsecured loans for people with a bad credit history. However, these rates can be lower than many credit cards.
Finding the right Unsecured Loan
Remember that different lenders have different fees so you need to make sure you take the time to compare loans. You need to make sure you read the terms and conditions of the loan fully and that you are aware what happens if you miss payments. By missing payments you risk having to deal with high interest charges and other fees which can easily accumulate. You will also damage your credit score.
If you are considering an unsecured loan, make sure you look at all of your options. Use the table above to compared different products from a variety of lenders.
02 October 2012 16:00
Which Way to Pay
A secured loan can help you in many ways including supporting you financially however there are risks involved which can be devastating.
23 May 2012 17:00
Loans usually fall into two categories – secured and unsecured. Make sure you the pros and cons of each type before you apply.