Unsecured Loans

Who hasn’t been in a strapped-for-cash situation? You’re on the way to make your tuition payment when your car sputters to an inexplicable stop. You fall victim to a leaky roof a week before your two-year anniversary with a high-maintenance partner. You need an emergency root canal… two days after you just blew your savings on a ritzy engagement ring, AND booked tickets for a romantic California getaway.

Situations like these are the reasons unsecured loans were invented. An unsecured loan is a no-hassle, no-questions-asked loan given by a bank or other financial institution. Chances are, you won’t even be asked how you’re planning on spending the money. However, you will be asked to prove that you can pay it back.

Consumers are drawn to unsecured loans because of their convenience. Usually, unsecured personal loans are approved within one to three business days. There is, of course, a catch: unlike other types of loans, unsecured personal loans require no collateral, so the lender you’ll pay back by charging you very, very high interest rates. To get an idea of how expensive unsecured loans can be, think of the interest on your credit card. Chances are, the interest rates on your unsecured loan will be even higher. As well, unsecured loans are not tax-deductible. Finally, besides interest, you will likely also encounter an annual service or maintenance fee on the loan. This fee can be either a flat fee, or a percentage of the lump sum.