What is an unsecured loan?
The unsecured loan is a type of financing that is granted by banks or credit institutions where the only guarantee required is the signature of the applicant. As can be seen from the same etymology of the word, unsecured loan derives from Greek and means “handwritten”.
The unsecured loan is a loan absolutely free of mortgages or pledges, the only real guarantee is the signature of the applicant which can be double or triple if two or more guarantors intervene to protect the loan.
The unsecured loan is a loan granted in the presence of the applicant’s subscription and the certifications that can attest to the income of the applicant.
Unsecured loans include personal loans, assignments, honor loans which have the common characteristic of being totally free of material guarantees, in addition to loans exchanged and requested through assignment of the fifth.
In the case of the assignment of the fifth, however, a further guarantee to obtain the loan is the presence of a salary, a secure loan for the banks that will be able to obtain repayment of the credit through direct credits on the pension or salary received.
Unsecured loan guarantees to obtain financing
The presence of the only signature useful for obtaining an unsecured loan could lead one to think that it is a type of unsecured loan, but this is absolutely not the case. By signing, the beneficiary undertakes to repay the entire amount of the loan requested, in addition to having to transfer to the credit institution the right to use an asset to protect the repayment of the loan requested.
In the unsecured loan, the signature of the subject and the guarantor must necessarily be completed through the granting of an asset, thus allowing the bank to seize the asset in case of risk of insolvency or referring directly to the applicant’s TFR.
In this case, the signature of one or more separate guarantors may be indispensable, which will be accompanied by that of the contractor.
How does unsecured loan work?
The unsecured loan can be requested by any entrepreneur or worker who needs access to credit, but who has an income that can be used as a guarantee for the repayment of the loan installments.
Often the unsecured loan is carried out by several subjects to obtain useful loans for the realization of interventions on public or condominium structures, works on which it is not possible to take out a mortgage.
Like any other type of financing, the unsecured loan also provides for the repayment of the amount in monthly installments which can be customized regarding the real economic possibility of the subject.
The amortization plan provides for monthly installments consisting of a portion of the capital to be repaid and a portion of interest. It is essential that the applicant, before taking out an unsecured loan, knows in addition to the interest rates applied, also the possible preliminary fees, commissions or the stipulation of insurance policies which often become mandatory.