Unsecured loan

Unsecured loan

 

Unsecured loan for home renovation? Yes thanks! If you want to make a small purchase, maybe an appliance, if the kids have grown up and it is necessary to change the furniture of their room, or if your home cries out for revenge and a minor renovation is needed, there is a type of loans made just for you : unsecured loans precisely.

Despite its apparently complex name, the unsecured loan only means a “signed” loan. A particular type of loan, however, where no other guarantee is generally required except the signature of the applicant.

Unsecured loan, how it is structured and how it works

Unsecured loan, how it is structured and how it works

As mentioned, the only guarantee required is the signature of the debtor. The presence of a notary is not required, as is the case for the mortgage loan, and this is an obvious saving. Furthermore, since there is no mortgage, it is not possible to risk a foreclosure in the event of non-payment.

The presence of a guarantor is not always required, as in the case of other forms of loans, but it could be “welcome” or perhaps those requesting credit may be asked to ask for bills of exchange or pledges on securities.

In relation to the lower request for guarantees, there is the lesser amount of the amount that can be requested, which generally does not exceed 10,000 euros.

As regards the duration, the unsecured loan never exceeds 4 or 5 years and therefore is considered a short-term reason. On the other hand, the return time is perfectly related to the small amount of the amount granted.

As with other types of loans, the repayment takes place in monthly or quarterly installments. The amortization plan is obviously decided together by the applicant and the Institute that grants it. The rate, always like other loans, can be variable, fixed or mixed.

As was said at the beginning, the unsecured loan is generally required to buy furniture or to face small expenses.

Types of unsecured loan

Types of unsecured loan

The unsecured loan should not be confused with the mortgage, more correctly with the mortgage loan, because in this second case you would be forced to take out a mortgage on the property, which in the case of the mortgage loan is not required.

The assignment of one fifth of the salary or pension are types of mortgage loans, in which never (unless there are very few exceptions) can there be requests for guarantors, because committing one’s income is already considered a sufficient guarantee by the Banking Institutions.

The unsecured loan therefore, especially in the renovation of a house, can be a useful ally in the realization of a dream, small but very very concrete. More details on the unsecured loan.

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