Non-Secured Loans

A Quick Guide to Understanding Non-Secured Loans

Do you need money in a hurry? One of the best ways to get cash quickly is with non-secured loans. These loans provide you with the ability to acquire financing without fronting your car or your home to secure the loan. Typically most credit cards are considered non-secured loans as you are given a line of credit and you need to avoid overspending from this amount.

What do you need in order to get non-secured loans? Here are some helpful tips.

Your Credit Rating

What does your credit currently look like? Do you have a score that is below 700? Your chances of getting non-secured loans will dramatically decrease if you do not have a strong credit rating to show lenders that you can afford to repay the money you borrow. They will take a look at your payment history to see if you have ever defaulted on loans and if you are able to make your monthly payments on time. Knowing your credit score before you apply for a loan will go a long way in your ability to gain approval for the loan.

Your Income

Non-secured loans require you to have a source of income. Since you are not fronting collateral to reduce the risk to the lender, they will take a good look at your income status to find out if you can really afford to pay the loan. If you do not have enough money to pay the loan and your other debts, you will be denied or the lender will reduce the total financing amount available to you. The lender will require copies of your recent bank statements along with proof of income to make sure you really can afford the loan.

When you apply for non-secured loans, get ready to go through a process of negotiation. Depending on the lender you choose to work with it can take upwards of an hour to walk out with a check. This is because they first need to approve the loan by checking your credit and then they need to take a look at all of your debts. Sometimes they will roll other debts into the loan for you, but be careful about doing this as the interest rate may be higher on this loan. They will also offer you a number of insurance options for the loan which can increase your total financing amount.

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