What is an unsecured loan?
Unsecured loans are a kind of personal loan which are not supported by any collateral. It defines a process where the borrower does not need to pledge an asset like a car, a home, or any valuable item as the loan collateral. Instead, lenders approve the loan applications based on the applicant's trustworthiness.
To assess that trustworthiness, lenders usually consider factors like credit score, monthly income, debt-to-income ratio, and recent financial performance. As one of the trustworthy direct lenders, Quickloanslender will try to customise the best offer for unsecured personal loans based on your income and affordability. Make the most out of our practical features like:
- No need to put your assets at risk
- Get pre-approved to compare unsecured loan rates on the go
- Quick payout because of faster processing
- Get a fixed-rate unsecured loan with predictable repayments
Beware of the consequences of unsecured loan default. It might result in penalty fees and credit file marks. You might have to take out costly CCJ loans.
How does an unsecured loan work?
Unsecured loans from direct lenders work in a streamlined way. These allow you to get the desired funds from a loan provider without offering any assets. Here is the step-by-step guide on how the loans work for everyone:
- Details to submit: Although not much paperwork needs to be done for these loans, the lender requires personal and financial information of the borrowers. These are particularly related to monthly income or employment stability. Your credit history also comes into consideration, along with the required loan amount and purpose.
- Credit check: Your credit score plays an important role in the loan approval. Most lenders prefer fair to excellent credit scores, but we accept those with poor credit histories. We consider other factors such as debt-to-income ratio, recent repayment history, and overall financial performance of the last 6 months.
- Loan quote: Once your application is received, we send you a detailed no-obligation loan quote. You will find the details like loan amount, interest rate, loan term, and monthly repayment plan. Check these loan details carefully and then approve the quote.
- Fund disbursal: We directly deposit the loan amount into your bank account. It can mostly be done within 24 hours. Now, you can use the amount for various financial purposes.
- Loan repayments: You will repay the borrowed sum through split monthly instalments. These will carry the principal amount and the interest rate. Missing a repayment will affect your credit score and may invite fees or penalties.
You can use the unsecured loan repayment calculator to understand the amount of interest you have to pay and the total amount you will have to repay. Here, a real-life example will be demonstrated for your easy understanding. Consider it as a monthly instalment guide as well.
- For home improvement purposes, you want to apply for a £10000 unsecured loan
- Pre-approved offer shows you will have to pay fixed rate with unsecured loan i.e. 6% interest, and the repayment term will be 3 years
- Amount to be repaid monthly will be £ 322.67, which might be equal to the utility bill of your family
- After 36 months, the amount you have paid back will be £11,616.12
Because of the renovation, the value of your home has improved. To save some amount of money on interest, you can pre-pay loans.
Who can apply for unsecured loans?
Anyone who is 18 years old, a permanent UK resident, has regular income and holds a valid bank account can apply for these loans. They should have the required repayment capacity to qualify easily.
Where can I use an unsecured loan for?
You can use short-term unsecured loans for various personal or everyday expenses. Compared to a mortgage or a car loan, lenders put fewer limitations on the use of the loan amount. Here are the most typical and acceptable loan purposes:
- Debt consolidation: Facing trouble with multiple debts? You can combine those high-interest debts into a single loan and pay one interest rate only. It will simplify your household budget, and you can reduce monthly costs.
- Home improvement: You renovate your home, like a new kitchen, painting, or mandatory repairs, by borrowing money with no collateral. It also does not need home equity.
- Medical emergency: Are you running short of funds to treat your urgent health problem? Not to worry, as unsecured loans are easily accessible to manage medical bills, surgery, or other treatment not covered by insurance.
Why should we apply for unsecured loans?
- Holidays: There is no need to put an extra burden on your income or to disturb your savings. These loans can fund your honeymoon trip, family holidays, or international visits.
- Life events: Since no collateral is involved, an unsecured loan is ideal for major life events like birthday parties, weddings, retirement celebrations, or even for a funeral.
- Financial emergencies: These are short-term loans and therefore, involve minimum obligations to fulfil. As a result, instant funding is possible, making them useful for financial emergencies like car repairs, unexpected bills, or unemployment.
- Education costs: These types of loans are ideal for students, too. They can borrow money to pay the course fee for a shorter tenure or purchase stationery. However, these are not for paying full tuition fees. For that, you need to apply for student loans.
- For business purposes: You can get this financing option as personal loans for self-employed people as well. They can be used for any side business you are managing with your job.
What are the main differences between unsecured and secured loans?
Deciding on a secured loan and an unsecured loan is not easy at all. The former is subject to losing your asset in case of a default, and the latter is subject to higher interest rates than secured loans. For example, if you borrow £10000 as secured and unsecured funds and carry out loan comparison, the approx. cost difference might be £800. It seems like you are stuck between the devil and the deep blue sea.
Now it does not need to be confusing at all because here you will get a detailed insight into it to make a better decision.
| Secured Loans | Unsecured Loans |
|---|---|
| They are subject to collateral. | You do not put security to take out these loans |
| Interest rates are lower, but there is a risk of losing the asset in case of a default. | Interest rates are slightly higher, but there is nothing to worry about. |
| You can borrow a large sum of money, depending on the value of the security you turn in. | You cannot borrow a large amount, yet Quickloanslender will allow you to borrow as much as £25,000, subject to your affordability. |
| These loans offer a longer repayment term, and hence the total cost of the loan can be a bit higher. | They relatively come with a shorter repayment term, and thus, you do not end up paying a huge amount in total. |
What are the advantages and disadvantages of unsecured loans?
There are two sides to every coin. Likewise, unsecured personal loans have their benefits and drawbacks. You mustn't throw caution to the wind while applying for these loans. Otherwise, it may impact your credit score and financials.
Tap it only if you can comfortably afford the monthly payments. Analyse your liabilities, budget, and loan amount to pursue before applying. Check these advantages and disadvantages to decide better:
| Pros | Cons |
|---|---|
| You don’t have to take the risk of losing your asset if you miss the payment. Therefore, these are ideal for those with no collateral to pledge. | Unsecured loans typically have higher interest rates, as there is no collateral to secure for the lender. |
| As compared to secured loans, no-collateral loans bring quick funding, most probably on the same day. | You can borrow a smaller loan amount than with secured personal loans. But sometimes, it is satisfactory during an emergency. |
| You have the flexibility of using the loan amount for any permitted purpose. | Lenders usually keep strict unsecured loan eligibility criteria, especially related to the credit score. |
| With a fixed and flexible repayment term for this personal loan, it is easier for you to manage your budget by knowing how much you need to pay as a monthly instalment. | Your monthly instalments will be hefty because of the shorter repayment period. |
| You can build or improve your credit score by paying loan on time. | Missing the instalment or defaulting will hurt your credit score. |
Are there any alternatives to unsecured loans for you?
There are some circumstances when you may fail to qualify for an unsecured loan, but you can consider the following alternatives where no collateral is required:
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If you lack collateral to place but a guarantor is also not available to back you, the option of unsecured loans with no guarantor can be considered. These are also short-term loans available for smaller amounts and durations. Lender will consider other factors to approve a no guarantor loan application, such as debt-to-income, credit score, recent financial performance, and monthly income.
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There is another alternative to specialised unsecured loans, i.e., doorstep cash loans. The lender sends its representative to the borrower's home for the loan processing. Once the process is done, the amount will be disbursed on the same day. The same representative will arrive at your doorstep to collect the weekly or monthly instalments.
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These are income-based short-term loans that you can use in emergencies. You may get unsecured payday loans by revealing your full or part-time income slip. It requires one to clear dues the day after “payday” or salary day. You may get up to £1500 for your instant requirements.
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Debt consolidation loans
In handling multiple debts to clear, unsecured loans for you are indeed an effective option. Still, for the major debts to eliminate, you should pick specialised loans for debt consolidation. This will give you a better advantage of lower interest rates and long-term financial relief. With cleared debts, your future borrowing chances will increase.
I want an unsecured loan with bad credit. What should I know?
There is no doubt that online lenders in the UK offer unsecured loans for bad credit. However, the bad credit unsecured loan rate might vary from 30% to 49% as low credit scores are considered risky. With us, you can expect to get a competitive poor credit loan cost.
What is considered a ‘bad credit score’?
Generally, a credit score below 600 is considered bad by many lenders. This happens due to multiple reasons, such as missed or late payments, high debts to clear, bankruptcy, or defaults. Bad credit loans belong to this category only.
How do online lenders like Quickloanslender approve my application?
We are among the few direct lenders for personal loan who serve the financial purposes of individuals with poor credit scores. We approve unsecured personal loans for bad credit, depending more on your monthly income and employment than your credit score. We also consider the recent financial performance of the applicants.
Will an unsecured loan affect my credit score?
Unsecured loans for poor credit can disturb your credit score in two ways. First, you apply at multiple lending firms for these safe online loans, and they will check your credit score separately. It will leave multiple search footprints that certainly impact your credit score. Second, you miss the repayments or default during the loan tenure. Therefore, you need to be sincere while applying for these loans.
Will there be any credit check?
Yes, there will be a mandatory credit check before approving your loan application. However, we assure you with a soft credit check that will keep away search footprint from your credit profile. Be aware of deals mentioning unsecured loans with no credit check, as they can be highly costly.
Is a guarantor mandatory to get unsecured personal loans for bad credit?
There is no such obligation, and you have a chance to get unsecured loans for bad credit with no guarantor and no fees. However, your monthly income should be steady, and you have the capacity to repay. The interest rates will be higher.
How do I apply for an unsecured loan?
Here, you get a straightforward online application procedure with step-by-step loan process to follow. Here is the complete guide to help you apply and get these no broker loans in the UK with an instant decision:
Step 01: You should determine your actual loan needs, particularly related to loan amount and term. Also, consider how much of a monthly payment you can manage.
Step 02: Get pre-qualified by opting for our soft credit check. It will not hurt your credit score. Review the loan amount, duration, and the interest rates that you can afford.
Step 03: Submit the online application with mandatory details and get a no-obligation loan quote. Give your consent to the quote by accepting APR, loan cost, repayment schedule, etc.
Where should I apply for an unsecured personal loan?
These loans are available with both traditional lenders and alternative online lenders. With mainstream lenders, the approval may take 2-3 days, while online lenders usually do it within 24 hours. Quickloanslender also brings instant loan decisions and same-day fund transfer.
Why choose Quickloanslender? It's your smart move!
Choosing us as your short-term unsecured loans direct lender brings many benefits to your personal finances. We give special emphasis on transparency, faster processing, and no third-party interference. Here are more reasons why opting for our loans is your smart move.
- Instant unsecured loan approval and funding: We ensure quick funding access for you because we deal 100% online and have no middlemen.
- Competitive interest rates: Since our rates are affordable, you can get a transparent APR with these UK loans matching your income capacity.
- Flexible terms and better communication: Our loan terms will vary from 12 to 60 months. You can choose to repay fortnightly or monthly in the form of instalments.
- Proper customer support: We are available 24/7 to ensure better customer support throughout the loan term. Our dedicated team will guide you properly so that you can manage the loan easily.
No collateral, no worries? Our affordable unsecured loans online are there to utilise.