There are two types of loans: secured and unsecured. Here at Simple Fast Loans, there are multiple personal loan options. Keep reading for a broad overview to avoid any confusion about these terms. This way, you can choose the right loan type for your personal situation.
With a secured loan, you will use an asset as collateral for a loan. In the case of a registration loan, this will be in the form of the registration of your vehicle.
When you take out a secured loan, your loan amount will depend on your asset's value. For example, with a registration loan, the value of your vehicle will determine how much you may be able to borrow. Other factors may also be taken into consideration here. For example, if there is another name on the title (e.g. if you received the vehicle through financing that has yet to be paid off), the amount you can borrow may be slightly less.
A credit check will be carried out if you want to get your hands on a secured loan. However, this credit check isn’t anything too strenuous. It is more to ensure that you have a strong chance of being able to pay the money back. This means that you don't really need to worry if you do not have the greatest credit history in the world.
A secured loan is going to be cheaper than other forms of borrowing. This means that if you do have an asset, it will be one of the better routes to go down.
You may also be able to borrow a higher amount compared to an unsecured loan. The loan will often be handed out over the long term. This means that you have more time available in which to pay it back.
You also stand a much better chance of being approved if you do not have the greatest credit history in the world. This is because the main concern is that you have the ability to pay the loan back.
A secured loan can sometimes take a little more time to apply for. Not that much longer than an unsecured loan. However, the lender needs to check whether you legally own the asset you are putting up as collateral, as well as double-check how much the asset is worth.
Finally, with a secured loan, you may be able to borrow less than if you went down the route of an unsecured loan. This is because the maximum the lender will ever be able to lend you when it comes to a secured loan will be the value of your asset. So, if your asset is only worth $200, you can only borrow $200.
A secured loan is the best option for those with an asset worth. A registration loan will be the registration of your vehicle. The more your vehicle is worth, the more you will likely borrow. In many cases, you may be able to borrow a lot more cash with a secured loan than if you went down the unsecured route.
Because the credit checks for a secured loan are much less strenuous, you also stand a much bigger chance of being able to borrow cash if you do not have a great credit score.
Of course, a secured loan is also going to be ideal for those that want a slightly cheaper way to borrow cash. If the repayment terms of an unsecured loan are a little bit too high, then some people find that putting an asset up as collateral will result in the repayments being reduced.
SimpleFastLoans offer the following unsecured loan:
An unsecured loan is the opposite of a secured loan. This means that you are not going to be putting up an asset as collateral for your loan. Instead, the lender relies on your word that you will repay the loan. This often means that there will be a few more checks to determine whether you have the ability to pay your loan back.
For example, you may need to provide proof of income, and your credit history may be reviewed. The credit check is more to determine how much the lender can lend to you rather than being a deliberate bar to obtaining an unsecured loan.
However, the main pro of an unsecured loan is that you don't actually need an asset to give up as collateral.
The major pro of an unsecured loan is that you do not need to have any assets if you want to get your hands on one. Most secured loans will require you to own a vehicle. This means that if you do not own a vehicle, an unsecured loan may be your only option.
It is fast to borrow cash with an unsecured loan too. Depending on the lender and your personal circumstances, the entire borrowing process can be wrapped up in as little as 30 minutes.
In some cases, it can be trickier to get hold of an unsecured loan if you do not have a great credit history. It isn't impossible. It is just a bit more difficult.
Finally, an unsecured loan may not necessarily be brilliant for borrowing larger sums of cash. This is because the more a lender loans out, the greater the risk they are going to have to be dealing with.
An unsecured loan is best for those who want to borrow smaller sums of cash. Although, depending on your state, you may find that you can get an unsecured loan of up to several thousand dollars.
The borrowing process for an unsecured loan tends to be a little bit quicker too. This is because there will be no vehicles to inspect. The bulk of the process can be completed online or by phone. It really is quite speedy. This means that people can get their hands on the cash they need for emergencies, often on the same day.
An unsecured loan will also work best for those that do not have any assets to offer as collateral. Obviously, you are not going to be able to get your hands on a registration loan if you do not have a vehicle.
Unsecured loans are also a good option for those that are in employment. When you take out an unsecured loan, you need to show that you have the ability to pay the loan back. Yes, some lenders will accept non-employed sources of income e.g. unemployment and disability benefits. However, they will prefer that you have a source of stable employment income. It shows that you have more of a chance to pay the loan back.
Finally, these loans can be ideal for those with a decent credit history. It is unlikely that you are going to be excluded from borrowing cash just because you have a few blips on your credit report. However, you will likely find it much harder to get approved for an unsecured loan if you have no credit history or a credit history that is completely riddled with non-payments of debts.
It is pretty easy to tell if you are getting a secured loan.
If the lender asks you to put up collateral for the loan, then it is secured. For example, with a registration loan, you will be putting up your vehicle's registration as collateral for the loan.
If you are not asked to hand anything of value over (e.g. no cash, title to your vehicle, registration, etc.) then you have an unsecured loan.
If you are unsure whether you have a secured or unsecured loan, feel free to confirm with the lender.
It depends on from which perspective you are looking at the loan.
A secured loan is always going to be safer for the lender. Because you are giving up an asset as collateral. This is how lenders are often able to loan more cash if you have a secured loan. If you pay your loan back on time, everything will be fine.
For the most part, you probably won't have to worry too much about whether you are getting a secured or unsecured loan. The only time it will really matter will be when you are determining how much cash you need to borrow and your overall credit history.
Both secured and unsecured loans are viable options for those that wish to borrow cash. Your choice of loan will be dependent on your personal circumstances. Generally speaking, if you want to borrow more cash, then you would opt for a secured loan. If you want a loan to be paid off within a week or month, then an unsecured loan is perfectly fine.
If you have any questions about any of the loan products offered at Simple Fast Loans, feel free to contact us.
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