Know the Difference between Secured and Unsecured Loans

Know the Difference between Secured and Unsecured Loans

Times are tight, and many people are seeking alternative methods of lending to help them with emergency expenses. At any given time you could be subject to your car breaking down, or maybe you need the extra money to pay for your pet that requires medication. If you need cash now, CASH 1 Loans can help you with a more flexible alternative. We offer installment loans with no credit check.

 

Difference between Secured and Unsecured Loans Explained

With these loans, you can stretch your term out longer over time, which reduces the cost of your monthly payments as the entire loan is not required to be paid back all at once. They typically do not need a credit check so anyone can get approved, and the application usually takes less than 10 minutes to complete. All that is required to apply is a steady source of income. There are two forms of installment loans to be aware of - secured and unsecured.

 

Examples of Secured and Unsecured Loans

If you suddenly find yourself in a situation where you require cash, be it car repairs, home repairs, school expenses, or even a sudden jump in your utility bills. If you don't have perfect credit, or if you have no credit at all you might think you are out of options. However, you may not have considered or even known about online title loans or the secured loan definition. This is a great way to get money to get you through this emergency. The other option you have at your disposal is an unsecured loan, you won't be able to get as much money for this type of loan, but if you need a bit more money to pay off that electric bill, then this may be the better option for you.

 

Benefits of Secured Loans

You might be wondering why someone would decide to choose a secured loan over an unsecured loan because you don't see why someone would want to risk losing their property. Well, there are a couple of reasons why choosing car title loans always secured by collateral may be beneficial. For starters, people who prefer a secured loan generally don't have the best credit, by opting for the secured loan they will be able to receive more fund than they would with an unsecured loan. Some people's credit also doesn't allow them unsecured loans approval, but there are often circumstances that are out of their control and have to have some way to get a loan, that's where the secured loans come in. By allowing the lender to have permission to take possession of the asset in the instance of someone defaulting on their loan they have a lower risk when lending you money.

By taking out these loans and making the payments on time, the lender will report your history of payments to the credit bureaus and improve your credit score. However, this also means that if you miss payments or make late payments, it can negatively affect your credit rating. If the lender has to take possession of your assets on a secured loan, this can drastically change your credit rating as well, so it is vital that if you decide to take out these loans that you can make these payments.

 

Before You Consider a Loan

You should review the amount of your next paycheck so that you can determine how much you can realistically pay back within your budget. CASH 1 does allow you to renew your loan if you need to, but continuously doing this will cost you more in the long run. To avoid this, even if you have to renew your loan, you should still put as much money aside to start paying back the loan so that you can reduce the principal, amount that you owe, saving you money on interest. Also, make sure to look into other ways to finance these unexpected expenses before you look into getting a cash title loans. There are other options that you can use that won't cost you as much in interest, but if you do resort to getting a loan be it secured or unsecured make sure that you will be able to pay it back and it won't put you in further financial risk.

Another option you should consider is getting another source of income. By getting a part-time job and working a couple of extra hours a week, you may be able to pay for this expense without getting a loan. Getting another job can be tiring, but it would also save you money that you would typically have used to pay the interest attached to any loan that you receive. Not having to pay back a loan plus the interest it accumulates can help you budget for any other emergency in the future.

If you are unable to make a rent or utility bill payment, try contacting the person or company which you owe the money, often they will grant forbearance on these payments (allow you to make a late payment) without charging interest on them. You can even use this method if to put the money that you would usually use to pay those bills and put it towards whatever emergency expense that you have and make a late payment on rent instead. Just make sure to consult the party that you owe the money to first to inform them about your situation and make sure that it is acceptable for you to make a late payment.

If you do end up getting a loan, try to get the lowest interest rate possible to reduce the total amount that you will have to pay, continue to make payments and if possible start setting aside money for an emergency fund. I understand that budgeting can be tough, but having this emergency fund set aside can be a lifesaver. This fund can come in handy in case something comes up again, this way you won't have to run out and get another loan. Also consider whether a secured loan or unsecured loan is the best option, getting a secured loan using your car that you use to get to work might not be the best option unless you are positive you will be able to make those payments on time. If you aren't able to make those payments, you are going to be at risk of losing your transportation to and from your place of income which can spell disaster in the future.

 

Use Collateral to Receive More Cash

A Secured Loan or title installment loan is when CASH 1 has a form of collateral as part of the transaction to minimize the risk of the loan. It means more cash for you. An auto title loan is a form of a secured personal installment loan as we will keep the title in return for lending you the amount financed. You can still drive your vehicle, and we’ll lend you up to $50,000 depending on the equity it has available. An unsecured line of credit has smaller borrowing amounts because there is no collateral involved. The repayment structure is still longer than a payday loan. You can receive up to $1,500 if your income and expenses allow you to afford it.

Unlike a secured line of credit, an unsecured line of credit that goes into delinquency resolves through legal action. The lender cannot go into your home and take things that they think is of equal value. For the secured loan, they technically own the rights to whatever asset you put forth in the contract, and they are legally allowed to take possession of that asset is you go into delinquency. Don't worry though, if you make your payments on time the lender will not try to seize your property.

 

Secured and Unsecured Loan Requirements

For a speedier process when you apply, you should provide a Driver's License or State ID card. We’ll need to verify proof of income to determine the amount of your loan. A pay stub or banking records are the most common, but disability and SSI can also both be considered as income. You’ll need an open bank account and at least two personal references. Also, keep in mind that you cannot be on Active Duty in the Military.

 

Duration of Secured and Unsecured Loans

Each loan has a different payment plan. The unsecured personal installment loans will have to be paid back in three months or 90 days. A CASH 1 title installment loan has a repayment period not to exceed 210 days. We never have an early payoff penalty, which means you can pay the full amount before your final due date. If you think a title loan in AZ or a Nevada title loan is right for you, give us a call at 800-431-4198.

 

What's the difference between secured and unsecured loans? A secured loan has collateral to minimize the risk to the lender. Unsecured loans do not need collateral.

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Bad Credit Loans, Installment Loans

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