Non Secured Loans

There are many different types of non secured loans available today. The easiest kind is a personal loan, which can be borrowed from family, friends, or co workers, with a simple I.O.U., which is just a signed repayment agreement. You need to be very careful when taking out this kind of loan, as not paying it back can cause huge conflicts between you and the lender. If you borrow a huge sum of money, and fail to repay it, it can destroy the relationship you have with the lender. The lender can take you to small claims court if the loan does not get paid back, or if they are not satisfied with how fast you are paying it back.

Non Secured Credit Card Loans

Another non secured loan is the common used credit card. Whenever you buy something with your credit card, you sign a form that gives authorization for payment, and your signature means you must pay that amount back to the credit card company. Loan amounts are generally predetermined at the time you are approved for your credit card. You will have to abide by and agree to all the credit card company’s set terms. There is no collateral needed for a credit card unsecured debt loan. They only have your signature as an agreement to repay the loan.

Credit card companies will add extra fees and interest to any loans not paid back on time, and will even send your account to a collection agency which will begin legal proceedings against you. If you have a financial hardship, you may be able to file bankruptcy to stop the collection process. This keeps the credit card company from making you sell all your personal belongings such as your car or home. Bankruptcy should always be a last resort, as it ruins your credit history, and can keep you from getting any other non secured loans later on.

Non Secured Bank Loans

Many banks will also give unsecured loans. They normally check your credit history, and if it is bad you may have to pay much higher interests rates, if they give you a loan at all. If you have a very good and high credit score, you should check around for the best interest rates for your loan. Usually the best rates come from credit unions that provide unsecured debt loans.