[postlink]https://gained11.blogspot.com/2010/12/unsecured-lending-is-kind-of-lending-in.html[/postlink]
Unsecured lending is a kind of lending in which the money lent is not backed up by collateral. In most unsecured lending, the lender protects their investment by knowing the creditworthiness of the borrower. Different kinds of unsecured loans are popular in today’s financial world.
When it comes to borrowing money, lots of individuals and businesses needing quick capital can profit from having “borrower assets” available. For private loans, these assets can be composed of vehicles, or homes and other properties. A good example would be a home equity loan, or HELOC ( home equity line of credit) situation. It’s important for the borrower to know that these assets are subject to repossession in cases of “default” for nonpayment of a loan.
Unsecured lending takes several forms. For private loans, a large spectrum of unsecured loan types are backed by the consumer’s individual credit score. A collection of three credit scores from different agencies compose one total score, which is known as the Fair Isaac or FICO score, named after the company that maintains rating systems for the overall credit score number. Consumers often know their own FICO scores, and try to undertake financial transactions that will promote a higher score in order to get better interest rates on unsecured loans.
As the popularity of unsecured loans has grown, financial companies have scrambled to extend them in all kinds of ways. Credit cards, for example, are unsecured loans. The company extends a certain dollar amount of credit, often based on nothing but the consumer’s credit scores. That leaves the borrower with an unsecured loan with all of the standard interest rates associated with those types of loans
When it comes to borrowing money, lots of individuals and businesses needing quick capital can profit from having “borrower assets” available. For private loans, these assets can be composed of vehicles, or homes and other properties. A good example would be a home equity loan, or HELOC ( home equity line of credit) situation. It’s important for the borrower to know that these assets are subject to repossession in cases of “default” for nonpayment of a loan.
Unsecured lending takes several forms. For private loans, a large spectrum of unsecured loan types are backed by the consumer’s individual credit score. A collection of three credit scores from different agencies compose one total score, which is known as the Fair Isaac or FICO score, named after the company that maintains rating systems for the overall credit score number. Consumers often know their own FICO scores, and try to undertake financial transactions that will promote a higher score in order to get better interest rates on unsecured loans.
As the popularity of unsecured loans has grown, financial companies have scrambled to extend them in all kinds of ways. Credit cards, for example, are unsecured loans. The company extends a certain dollar amount of credit, often based on nothing but the consumer’s credit scores. That leaves the borrower with an unsecured loan with all of the standard interest rates associated with those types of loans
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