Credit Crunch: Unsecured Personal Loans
What is an unsecured personal loan?
While a secured personal loan is one which is backed by some form of collateral (for example: a car, home, or other asset), an unsecured personal loan is issued based solely on the borrower’s credit history. Some examples of unsecured loan types are: store cards, credit cards (revolving accounts), private loans, or what are commonly referred to as “signature loans”.
“Secured” vs “Unsecured” Personal Loans
Unsecured loans are a matter of trust between the lender and the borrower, since there is nothing “securing” the loan which can be repossesed or sold off if the borrower does not repay. The consequences for not paying on an unsecured loan primarily consist of having your credit score and credit history ruined, which will make it very hard for you to ever obtain credit again in the future.
Traditionally, unsecured loans are only available to those with good credit, who have proven themselves to be creditworthy through a recorded credit history which shows that they’ve kept up with their payments, are rarely (if ever) late, and are not “maxed out” (meaning that they are not at the limit of what they can borrow, and so the risk that they are “borrowing from Visa to pay Mastercard” is small).
There are still a few lending companies who will make unsecured loans for bad credit, but they almost always do so at very high rates, which, if you think about it, makes sense – because it is more risky to lend money to someone looking for a loan with bad credit.
Where can I get an unsecured personal loan?
P2P-Credit.com makes unsecured loans for personal use, debt consolidation, home improvement, small business expansion, or for just about any other purpose for which you might need to get an unsecured loan.
P2P Credit does check to see whether you have good credit or bad credit (or in between) and will set their loan rates accordingly, but, even if you had “bad” credit, P2P Credit can still help you to get a loan from one of its partners. If you have fair to good credit, you can get a loan from P2P-Credit.com, directly and online, in a matter of minutes. First, though, they will check your credit score (and show it to you, for free!) and provide you with a free rate quote on your P2P Credit personal loan – which you will then have the option of accepting.
We think the best part about P2P Credit’s unsecured personal loans is that the loans are funded by individual investors – instead of banks!