There are many occasions throughout our lives when we need to get cash. We may be planning to buy our first home. We may have to make a reform in our commercial premises. Or we may need to buy a new car. In these situations, applying for a loan is usually the usual thing. But we are likely interested in loans without collateral. Those through which we must not present a guarantee (such as a property free of encumbrances and mortgages or even a guarantor).
At Tzedakah House we are going to talk about loans without collateral. From the meaning of this term, through the amount that can be achieved or the type of credits without endorsement that exist. In addition, we will also discuss who gives this type of loan. Would you like to know more about it? In that case, keep reading.
Loans without collateral
Loans without collateral are those that do not require an extra guarantee to be granted. Guarantees are precisely that, guarantees of payment for the lender in the event that the borrower cannot meet the debt. Through a guarantee, the lender obtains the assurance that he will collect all his money, including interest, even if at a given moment the borrower cannot respond financially.
The endorsement and the guarantee are terms that go hand in hand. It can be used as collateral for an asset or several assets with which to guarantee the loan payment. However, we speak of a guarantor when a third party responds financially for us and is responsible for paying the debt in case we cannot.
Not all loans imply the obligation to present a guarantee or guarantee. However, this does not mean that our assets are safe. There are many products that do not ask for this guarantee. However that does not mean that we do not have to pay. In fact, in these cases it is normal to respond with all our assets and properties to pay off the debt. Both present and future. For example, in these cases, to meet our debt, we can withdraw a percentage of the payroll. Or even seize part of our assets or our account until we respond to the payment.
Types of loans without collateral and who grants them
As a general rule, the guarantee or guarantee comes into play when the borrower does not have sufficient financial capacity to meet the payments. This happens, for example, when income is not regular or insufficient. So while our economic situation is more or less stable, we can access all kinds of loans without collateral.
Now that we know that it is possible to obtain loans without collateral, it is time to find out which ones are the most common.
This type of loan does not need an endorsement or guarantee to be granted. It is a modality that has become very fashionable in recent years. Lenders offer not very high amounts (between € 50 and about $ 2,000) to be repaid within a maximum period of 30 days . Many of these micro loans are extending their repayment terms to 60 days . Among the advantages of this type of loan, it stands out that they are granted practically instantly, that they do not require much information about the applicant. And that you can be enrolled in Credit Checker and also be granted it. They are loans that usually have high interest due to risks. Hence, it is not advisable to abuse them. They must be used in very specific situations where immediate liquidity is needed.
These loans are usually granted by alternative credit institutions to the traditional ones . It is quite common for these companies to operate over the Internet to offer greater speed of management.
Personal loans are without a doubt the type of loan without collateral that is most used in America. These loans can be of two types depending on who grants them:
Personal loans granted by traditional credit institutions
Those who are in charge of granting this type of loan are either lifelong banks or private equity companies. These credits can reach really high figures. In fact, you can get up to $ 90,000 without having to have a guarantee. However, we do not have to trust ourselves. We will respond to the debt with our present and future assets in the event that we stop paying it at any given time.
The requirements to obtain this type of credit are much more demanding than other models due to the high amounts that can be lent. For example, in this type of loan without endorsement or guarantee, we must demonstrate that we have a comfortable economic situation. In addition to not being registered in Credit Checker or any other delinquency file. The lender has to make sure in every possible way that he is dealing with a legit borrower.
Non-bank personal loans
In this case, these types of loans are granted by private lenders or private equity company. In this case we are talking about credits of lesser economic value. In general, we will be able to get around $ 5,000 on our applications.
Like micro credits, they are characterized by the speed of their procedures . These companies operate through the internet and offer liquidity to the borrower in record time. However, in these cases we will have more time to return the amount . Hence, the requirements are somewhat more demanding but in return the interests are less high .
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