1. 5 Important Things You Need to Know About
Unsecured Personal Loans
When you unexpectedly need cash for an emergency situation, an unsecured
personal loan is a quick solution to your problem. Before you jump the gun and
apply for an unsecured loan, it is best to do your homework to determine if this is
the type of loan you truly need. An educated decision is always the best when it
comes to money matters.
How Unsecured Loans Works
Most consumers resort to unsecured loans in times or urgent need because this
can be acquired without having to put up anything to secure the loan. In short,
these are collateral free loans. The bank or lending institution giving out the loan is
taking a great risk with this type of loan as compared to a secure loan.
A payday loan is one of the most common types of personal loans that do not need
collateral. The lender of a payday loan will give you a small amount of cash which
you can pay on your next payday. The lender of these online loans will often
require you to make out a check covering the principal of the loan plus the interest.
You do not need collateral to acquire this type of loan. Your signature on the loan
paperwork and your commitment to pay on pre-determined due dates are all that is
needed. The lender then gives you the money.
Secured Versus Unsecured Loans
When you avail of a secured loan, you are required to put up a collateral.
Collaterals are usually personal properties such as your home or car. If you are
unable to repay your secured loan, the lender will take possession of your personal

2. property to recover the loan extended to you. With no collateral loans on the other
hand, the lender relies on your promise to pay as stipulated in the terms of the loan
contract. If you default on your payment, the lender’s only option is to sue you.
Before Making the Decisions
Before you decide on unsecured personal loans, here are certain things you need to
know about this type of loan:
1. You do not risk losing any of your personal properties in case you default on
your payment.
2. It is easier to qualify for this type of loan than with traditional secured loans.
3. This type of loan is cheaper than making a cash advance using your credit
card.
4. This type of loan comes with a higher interest rate as compared to a secure
loan.
5. In case you are unable to pay the loan on the due date specified, you can
continually extend the loan by paying only the interest. Doing this however
will make you pay double or triple the amount of the original loan.
The high interest rate of loans without collateral often makes consumers think of
other alternatives such as borrowing from family and friends. If you have no
choice but to avail of this type of personal loan, make sure to shop around for a
lender that can offer you the lowest interest rates and the best payment terms.
Find out more information about Brookwoodloans by visit our website at
Brookwoodloans.com.