Posted on: 21st Apr, 2004 02:59 am
Those loans which are not secured against an asset and are therefore available as home owner loans or tenant's loans are known as Unsecured loans.
These loans are issued and supported by the borrower's creditworthiness. They are also known as signature loans and are not backed by collateral.
These loans are issued and supported by the borrower's creditworthiness. They are also known as signature loans and are not backed by collateral.
Facts About Unsecured Loans:
- These loans are available to tenants,council tenants,people in full time employment, part time employment, homeowners, housewives, househusbands, unemployed, retired, contract workers etc. Athough they may not appear as risk on one's asset, they in fact are as the debt and can be recovered through court proceedings.
- These loans can be used for any purpose like to purchase a new car, to pay off your debts, for home improvements etc.
- Commercial paper is an example of unsecured loans.
I am looking into getting an unsecured loan to start a business and have the following concerns:
1. How does the payback work?
A. Does this work more like a credit card or a home loan where you pay a minimum and how much interest you acrue or don't acrue is up to yourself.
2. Does this help business creditworthiness in the long run?
3. Can it ever be paid off and removed from credit?
Thank you very much for the help.
Regards,
Ben
1. How does the payback work?
A. Does this work more like a credit card or a home loan where you pay a minimum and how much interest you acrue or don't acrue is up to yourself.
2. Does this help business creditworthiness in the long run?
3. Can it ever be paid off and removed from credit?
Thank you very much for the help.
Regards,
Ben
ben, obtaining an unsecured loan for a business is not necessarily easy. of course, if you're only looking to borrow a small amount, you may be successful. business loans are risky for lenders, so your business must be well-established and you'll need to show sufficient resources to repay the loan.
