Securing Personal Loans Without Collateral

The main reason why you might not want to secure a personal loan with collateral is that there is always a risk of losing this valuable asset. And no one wants to be left without a vehicle or house, right?

Thankfully, there are ways to get collateral-free cash. And once you manage to find a legitimate lender that offers unsecured personal loans, you might be able to get your hands on the money that you need in the shortest timeframe.

How do collateral-free personal loans work and what do you need to apply for one? Keep on reading to find out.

What Is Collateral?

Collateral is a valuable asset that the borrower can pledge as security for a loan. For example, when you obtain a mortgage, the home serves as collateral, and for a car loan, the actual vehicle is the asset that secures the loan.

Collateral minimizes the risk for lenders as it helps ensure that the borrower keeps up with his or her financial obligations.

The type of collateral used generally relates to the nature of the loan. See some examples below:

•         Home equity loans leverage your house as collateral
•          Residential mortgages leverage your house as collateral
•         Auto loans leverage your car as collateral

What Are Secured Loans?

Loans that require some form of collateral can also be called secured loans.

The main thing that you should remember about secured loans is that the lender will be allowed to seize the collateral that was used to secure the loan if you stop making the necessary payments.

Pros of Secured Loans

• In most cases, you will have a consistent repayment schedule. This means that you’ll know exactly how much you need to repay each month (the same is true for the absolute majority of unsecured loans as well, by the way). Keep in mind that there may be exceptions here, like title loans, which is also a secured loan.
• It might be easier for individuals with less-than-perfect credits to qualify for a secured loan.

Cons of Secured Loans

• If you fail to repay the loan, you will lose your collateral. Your car or house can be repossessed, and you will be left without essential transportation or a roof above your head
• Not all lenders are ready to offer secured personal loans, and the ones that do have such an option might be scammers. So, you would have to do a lot of research beforehand
• If you apply for a secured loan, you might get the money that you need in only a week or even more. That is because you would have to spend some time proving that you do own a valuable asset and you might have to meet up with the lender so that the professional can assess your collateral

Do Personal Loan Lenders Require Collateral?

Personal loans can be both secured and unsecured. The lenders that do offer secured personal loans would require you to put down an asset as collateral. This will usually forego a credit check in some cases.

Credit unions and some banks offer secured personal loans. In the majority of cases, the lenders would require you to use a certificate of deposit, investment, or savings account to secure the loan. 

If you’re afraid of putting down such a valuable asset as your car, CD, or house, then you might want to opt for unsecured personal loans.

How Do Unsecured Personal Loans Work?

As the name suggests, unsecured loans are not secured by any form of collateral. Such loans are also sometimes referred to as ‘good-faith’ or ‘signature’ loans, as only your signature on the loan agreement guarantees that you’re going to give the lender the money that you have borrowed back.

This usually means that a lender would be taking more of a risk by lending money to you, so most lenders would require you to have stellar credit to qualify for an unsecured loan.

But the good news is that some online lenders are ready to work with all credit types. With Simple Fast Loans, for example, you can apply and get approved for an unsecured personal loan even if you don’t have good credit. 

Another big advantage of unsecured loans is that they are typically funded quickly. Once the loan gets approved, the money will be funded as a lump sum, and you would typically have to make the payments on a monthly basis.

How To Apply for a Personal Loan Without Collateral

Simple Fast Loans will never require any form of collateral to secure a personal loan. So, you wouldn’t have to worry about losing your valuable asset, in case something was ever to go wrong.

Another great thing about doing business with Simple Fast Loans is that the whole application process is easy.

Here is what you would have to do:

1. Prepare the necessary documents. To apply for a loan, you will need proof of ID, income statements, a social security number, and your active checking account. If you have these documents prepared, the next step should take you only a few minutes.
2. Fill out the online application form. All the information that you’re going to provide will be verified electronically, so once you complete and submit the form, you will immediately receive a loan decision. Do bear in mind that if you’re experiencing any trouble with the online process, you can always call the company directly for assistance.
3. Review your loan package. If you have qualified for the loan, a company representative will set up your loan agreement and then present it to you.
4. The loan package has to be signed online. You can easily enter the e-sign process through the website or through a special link that would be sent to your e-mail.
5. You will get a text once your loan has been funded. This can happen the following business day or even the same day when you get the loan package signed.

What Other Benefits Does Simple Fast Loans Offer?

You already know that Simple Fast Loans won’t require any form of collateral, but there are also a few other important advantages to know about:

• The company welcomes all credit. Poor credit won’t necessarily stop you from qualifying for an unsecured personal loan. Furthermore, this won’t be the only factor that the lender is going to take into consideration when making the decision.

• The loan amount might get funded the next day. You might receive the money by the end of the following business day. But if the loan gets signed before 2 PM, you may get it funded on the same day!

• All your information will be stored securely and confidentially. You wouldn’t have to worry about any security-related issues. Simple Fast Loans is a fully licensed, nationally recognized company that uses all that security technology has to offer to securely store your personal information. Furthermore, the company regularly undergoes third-party security audits to ensure that all the data is safe.

• The company is easy-to-reach in case you ever have any questions. You can always give the lender a call or send them an e-mail. If you have any urgent questions, you can chat with one of the company representatives online via a live chat.

Get Your Collateral-Free Cash Today!

Not every potential borrower has collateral that they can use to secure a loan. And those who do might not want to put it at risk. If you are one of those people, you might want to consider applying for a collateral-free personal loan.

Simple Fast Loans is an online lender that won’t require any valuable assets from you to secure the loan. Simply fill out the easy inquiry form online, immediately get an online loan decision, and receive the money you need in the shortest timeframe.