When your searching for unsecured loans there are a few prerequisites that have to be met before a bank or finance company will issue you the unsecured loan or line of credit.The most important of them is the guarantors personal credit score. The unsecured loan is based on the personal guarantor of the note and because of this high credit is needed.
There are different types of unsecured loans. The first type of unsecured loan is called a payday loan. This type of loan goes up to $1,500 and anyone that makes $800 a month and has a checking account will qualify. The problem with this type of loan is the interest rate is upward of 443%. These types of loans are not under the scrutiny of the federal banking department so the companies that issue them can charge whatever they want.
SIMPLE INTEREST UNSECURED LOANS A true unsecured loan is a simple interest loan and not compounded like a unsecured credit card. Simple interest means the rate will not change. If the term is for 5 years and the rate is 7%, then the rate and term will continue until the 60 months are though. To get this type of unsecured financing you have to have a good personal credit score that is free of collections, charge-offs, late pays and other red marks that underwriters hate.
Unsecured loans do not use deposits or have prepayment penalties. Certain banks and financial companies are chartered in certain ways that allows them to give out up to $250,000 at extremely low rates.
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