To help you know whether this finance product is right for you, check out some of its advantages and disadvantages.

Advantages of an Unsecured Personal Loan;

• This loan is a good option for you if you don’t want to risk your assets. In the case where you have already used your asset for security for another loan, you can avoid doing so again with this loan.
• You can consolidate your existing debts with this loan. Debt consolidation is when you bring all your existing debts together into one loan giving you control over your financial situation. Take out an Unsecured Personal Loan and use the funds to pay off your other existing loans.
• This type of loan is great especially when unexpected events arise like car repairs, urgent travel  and emergencies like medical expenses.
• Unsecured Personal Loans have fewer restrictions on how you can use the money. You can use it to pay for various expenses.
• The application process is shorter as you don’t need to show proof of assets.

Disadvantages of an Unsecured Personal Loan;

• • Interest rates are higher making them more expensive. Just like we mentioned earlier, the reason for this is because the lender doesn’t have an asset as security making the loan more risky. Notes that for Unsecured Personal Loans, the interest rates can either be fixed or variable. Fixed interest rates remain the same while variable can change on a monthly basis.
  • You may be charged an additional fee for late repayment or even repaying the loan early. In the case where you fail to make your repayments, the lender can take legal action.
  • The loan may not be available for the self-employed, part time employees and individuals with a poor credit history.