Unsecured Loan

Unsecured Loan - Guessing Your Weight

An unsecured loan is only unsecured in that you are putting nothing up n the way of collateral. There is no house, there is no car or family heirlooms your lender can take should you neg out on repayment, there is only your word that you will repay the loan and the upcoming paycheck that says you can.

The difficulties in providing an unsecured loan

We all complain about the high costs on our unsecured loan opportunities - $20 pr $100 we borrow? Thats insane - we're paying you back in less than two weeks! Exactly- an unsecured loan doesn't have the luxury of time, they can't charge a low amount for the service because if they did there would be no profit. Virtually the entire amount of your initial fee goes not to the lender but to the bank behind the lender - your lender has to get their money from somewhere, and they pay a pretty penny for fast access to your loan amounts. So, the question becomes how do these lenders make so much money off a single bad credit unsecured personal loan?

Guesstimating the money machine

Over 90% of all personal loan opportunities go into some form of late status - roll over fees, continuing interest. Call it what you will, the fact of the matter is we are paying significantly more for an unsecured personal loan than just the initial fee, and all that extra money goes to one place - the lenders' pockets. Thats where profit comes from and that is the motivation behind the unsecured loan. They don't want it secured, they don't want to offer a lower rate because you are putting something valuable up to guarantee the repayment. They know you are going to repay - write off rates in the unsecured loan industry are almost exactly the same as credit cards at about 2.8% - but they want to be sure it takes you a while and that the time you take will be extremely expensive.

They have your number, they know you need money and they know you'll pay any price to get it. So they offer an unsecured loan so you are forced to pay that any price.

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