Unsecured loans are carved out for those people who either do not own a valued asset or even if they do own, they do not want it to put at stake for a small loan. In other words these loans are the only option for the tenants or non-homeowners, whereas homeowners can also opt for the loan. But be aware of its pros and cons before approaching a lender.

An attractive feature of these loans is that the borrower does not incur risks, as no property is taken for collateral. Both tenants and homeowners can find these loans for varied purposes such as renovation of home, paying off old loans, throwing a wedding party, going to an exotic locale, purchasing a car etc.

However, the lenders usually first ensure that the applicant can repay a particular amount. Hence, credit history, earnings and employment record of the borrower is assessed by the lenders before approving a loan. You can be approved anywhere from 1000 to 25000, keeping your repayment capability in mind.

Unsecured loans are known for a little higher rate of interest on small borrowed amount. But the rate is usually fixed for many initial years, allowing you to make the fixed amount of payment for the installments. So, you can plan your monthly outgo in advance.

Repayment of the borrowed amount can be made in six months to 15 years as is the loan amount and your financial capability.

If your credit history is bad or poor because of tags like late payments, arrears, CCJs and payment defaults, you must be prepared to fork out interest at enhanced rates. To find out a suitable and burden less unsecured loans, first apply for its rate quotes. Know the APR on these loans. You should compare the rates as well as the additional charges to reduce the costs of availing the loan. Repay the loan on time to keep your credit file clean of any blemishes.