By seeking an unsecured personal loan, you can protect your assets from being seized should you go bankrupt. This article explains this further.
Unsecured personal loans allow you the luxury of financing your personal expenditures without running the risk of jeopardizing the possession of your home. Employ the following advice in order to obtain an unsecured loan and remove your property from the risk of repossession.
What is the need for unsecured personal loans?
In cases when your house is the sole property that you possess, it is undesirable to put it at any risk. That is exactly what is bound to happen if you incur some unprecedented expenses and you have no money saved up in your bank accounts. Situations like these call for some kind of financial assistance.
How to procure an unsecured personal loan?
In times of financial duress, unsecured personal loans are a viable solution. Since unsecured personal loans are not backed by any asset or security as collateral, the only factors that determine the approval of your loan are your credit score and history, the level of outstanding debt that you have incurred and in some cases, the level of your income.
A direct risk-rate relationship
Since these loans are not backed by collateral, there is a higher risk of default associated with them. This risk is accounted for by incorporating it in the interest rates charged on these loans, which then obviously tend to be higher that normal interest rates. Poor credit situation implies a higher default risk which then translated into a higher interest rate levied upon the loan amount.
Guarantee the security of your home against the risk of repossession
Unsecured personal loans come with the guarantee that the lender cannot lay any claim to your home in the event that you default. Despite having defaulted on your loan, your house is safe from repossession and the lender cannot touch your property.
The lender can, however, take legal action against you for the purpose of recovering his amount. This is often a desperate attempt and not employed often since litigation is a costly procedure and is very time consuming.
The time lag involved in legal procedures and lack of collateral do offer you a brief reprieve from paying back the loan immediately. You can use this time to seek an alternative method for repayment or for a way to negotiate the terms of repayment with your lender. Resetting the terms of payment will prove to be less costly for the lender as compared to legal fees.
Expedited Application Processing
Since there are no stringent checks involved in the process of procuring an unsecured personal loan, the loan application processing and resolution takes a considerably lesser amount of time than to regular loan applications. The total time taken between filing an application and receiving notification of the lenders decision takes less than 72 hours on average. The lender merely has to assess your credit report, determine the amount of loan and repayment program and notify you of his approval.
Enjoy Greater Flexibility
You can benefit from relaxation in loan repayment in terms of both monthly repayment amounts and the tenure of the loan term. The lender can ascribe longer repayment terms and lower monthly repayment amounts to you if you negotiate. As long as the lenders conditions are met, you can bargain for an extension and even a renewal of loan in the future.