Unsecured Loans, An Economic Booster?
Saturday, April 3rd, 2010The last 2 years or so have seen economies of the world go through a financial meltdown. Yes, the situation is improving but the climb up is always slower than the slide down. But life carries on and the only way out of a tight financial spot is right through it. Interestingly, there are some financial institutions (read banks) that are quite sensitive to customers needs and offer loans without demanding collaterals. In other words, they offer Unsecured Loans. An unsecured loan is granted based on credit rating, nothing physical that you own will be confiscated, if by chance you were to default on the repayment.
All that you would lose is your good name (which more often than not, is worth more than the world’s wealth in gold!). In this article let us explore two types of unsecured loans that have in recent times, been made easily available to people in dire financial straits. They are – small business loans and Personal Loans. Loans are being offered (without collateral) to small businesses. In America a small business is one that is privately owned, has limited sales volume and employs less than 100 people.
Minimal documentation, no annual fee and revolving lines of credit from anywhere between 6 months to 84 months, are the key features that make up these kinds of loans. Interest rates start at a very reasonable 6.99%. Payday Loans are usually granted to meet a personal need – a vacation, education expenses or outstanding medical dues. Here again, the loan is based on good faith alone, no collateral required. The amount of the loan is roughly in the $5000 range, but could vary depending on the bank and the customer. It is only through investment, production and consumption that an economy can recover. Fortunately, financial institutions are in sync with the same line of thought and are providing the necessary support.