What are Unsecured Loans?

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When you need a personal loan, it’s important to do a fair amount of research. There are many types of loans out there, and the costs and lengths vary widely. How do you decide which is the right loan for you?

First of all, personal loans may be either secured or unsecured. While these names may give you the impression that one kind of loan is “safe” and the other is “risky,” that isn’t the case. Basically, secured loans require the borrower to put up valuable assets as security against the loan. These assets could include the borrower’s home, car, savings accounts or investments. Then if the borrower defaults on the loan, the lender can take possession of the assets as a form of repayment.

Unsecured loans, on the other hand, don’t require any assets for collateral. Instead, a lender will look at the applicant’s credit history and other personal information in order to make a lending decision. Since the borrower doesn’t have to put any assets up as security against the loan, they are not in danger of losing their assets if they’re unable to make a repayment. However, the missed payment may be reported to the credit bureaus and could negatively affect the borrower’s credit history.

How to Choose a Lender

It’s important to apply with a lender you can rely on, who will be understanding about your financial circumstances. Look at the maximum amount of time you can keep your loan and what the fees or interest rates will be. Can you afford those rates and terms? If you’re applying for unsecured personal loans online, is the website secure? Does the lender have a customer service team available to answer your questions by phone, email and live chat? All it takes is a bit of comparison-shopping to make sure you’re applying with a lender that’s a good fit for your needs.

Finding Unsecured Personal Loans in Canada

Here at DollarsDirect, we offer short-term unsecured loans to qualified residents of Alberta, British Columbia, Saskatchewan and Ontario. New approved customers may borrow up to $500, and returning customers could get up to $1,500, if approved. Best of all, you may qualify for same-day funding if your application is completed before 1 PM on a weekday! It’s easy to qualify, as perfect credit isn’t required. Start your application today for an unsecured loan!