Pros and Cons of Unsecured Loans
The unsecured loans are the loans that are usually obtained only with the signature of the applicant and / or a guarantor. They are commonly recognized as unsecured loans. Here are some advantages and disadvantages of this type of loan.
Unsecured loans, pro
Unsecured loans are opposed to secured loans as they must not be backed by any guarantee. They must not be secured by a mortgage, but only by a paper subscription, in which the debtor undertakes to repay the loan with the relevant accrued interest.
The unsecured loan that in common terminology is also identified as a “loan”, does not require a mortgage with respect to the common mortgage loan. But it is not said that the lender cannot ask for other types of guarantee. In fact, the grantor may request a personal guarantee (such as a guarantee or the signature of a family member or a third party) up to the pledge on the securities. An unsecured mortgage always has a short term. His average life, in fact, generally does not exceed four or five years.
Credit is provided in a single payment. The unsecured loans belong to that type of financing that can be requested for different purposes. It can be used by companies for the purchase of assets functional to the activity, and individuals for individual needs. No coincidence that unsecured loans are also known as ” personal loans “.
Moreover, notary fees must not be incurred nor are those deriving from the subscription of insurance policies covering credit repayment in the event of death, disability or unemployment of the client. In any case, the biggest advantage in the unsecured loan is represented by the absence of a mortgage. The fact that a notary’s intervention is not required for the establishment of the collateral, not only brings advantages advantage in monetary terms but also creates the certainty that there will never be any foreclosures in case of non-payment.
Unsecured loans, against
The maximum amount that can be granted does not exceed thirty thousand euros. As with other types of financing, unsecured loans will also be repaid by the policyholder through the payment of monthly installments which will include principal and interest, as agreed upon at the time the contract was signed. The provision of such loans has a very painful note: the interests. In fact, if it is true that for unsecured loans the costs of ignition are lower, the interest rates are much higher than those guaranteed, because this is, in itself, a more risky loan for each credit institution lender.