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Unsecured Loans: Basic Introduction & Advantages

When it comes to loans, people get terrified thinking that they might not be able to secure a personal or a business loan due to bad credit or no secured property. However, the headache is taken away with unsecured loans. So, what are unsecured loans? When you are planning to take a loan, you will need to provide a type of collateral, even if you have provided your credit records and worthiness. Often, it becomes tough for small business owners or individuals looking for personal loan to provide a property for collateral for the loan. In these circumstances, unsecured loans can be helpful. In short, unsecured loans are loans which are not secured by any collateral, and the borrower's credits are the reason of securing such a loan. Naturally, if you are looking forward to an unsecured loan in Delhi, you will need to have a high credit record. Depending on your requirements, you can also choose private finance providers in Delhi.

Advantages of Unsecured Loans

Now that you have a basic understanding of the unsecured loans, let's look at the advantages of unsecured loans


#1: No Property/Mortgage

One of the basic reasons why people look for unsecured loans is that you don't need to risk your property or anything else. You can go ahead and choose any personal loan facility in Delhi NCR and the loan that you take are backed by the legal documents and your signature.


#2: Simple Application Process

Since, the unsecured loans does not require any property mortgage and is based solely on your credit score, hence the application process is simple.

 

Disadvantages of Unsecured Loans

As with everything else, there's a flip side of the coin in case of unsecured loans also. So, here's a basic details of the disadvantages you might face while choosing unsecured loans


#1: Higher Rates & Payments

Since you are choosing a personal loan without any mortgage from personal finance providers in Delhi, hence the lenders might charge you additional percentage for the loan. The exact amount of rates varies from lender to lender and you need to discuss that before taking a loan.


#2: Smaller Principal Amount

When it comes to unsecured loans, sometimes, the personal loan facility in Delhi NCR restricts the amount of money, which can be taken. This helps in preventing fraudulent practices and makes it safe for the lender.


#3: Shorter Repayment Period

With unsecured loans, you will have to repay them faster than secured ones, and at times, it becomes tough to do so. The reason for shorter repayment is to prevent the fraudulent practices and also due to the fact that only smaller amounts are lent out as unsecured or personal loans. One of the basic issues that might creep up with unsecured loans is it can lead to more debt depending on your financial condition. The basic reason why you applied for the loan was to better your financial condition, but due to fast repayment you might not be able to enjoy the benefits of the loan. So, now that you have an idea of unsecured loans and how they can help you, do go ahead and try that new business idea which you had in your mind. Need a helping hand with your financials? Contact us now and we will be happy to help you!

 

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