Unsecured Personal Loan Interest Rates
Unsecured personal loan interest rates are much different than secured ones because the loans have no collateral to back them up, which causes the unsecured percentage to be much higher than that on a secured amount. Although this may be a downside, consumers should keep in mind that the unsecured personal loan interest rate is usually high because it is only a short period of time. The percentage actually does vary from lender to lender. One question that one may have is if there is a maximum percentage. That depends on the type of personal loan desired.
Percentages vary on what one borrows. Credit card companies are allowed to charge pretty much whatever rates they want to as long as it is specified in the written portion of the agreement. Banks and credit unions also set their interest rates however they wish, providing it is listed in the written agreement. If the interest rate is not secured in writing, then the legal rate of 7 percent each year goes into effect. Because unsecured personal loan interest rates do vary, compare percentages before deciding on a particular loan. This lending may have it's downside but when the borrower doesn't want to have to put up their home or automobile as collateral, or doesn't have those items to put up, he or she must be willing to pay the slightly higher unsecured personal loan interest rates.
Unsecured rates usually only apply to smaller borrowed funds, and don't generally apply to businesses or certain other larger amounts, specified by the lender. Some lenders, however, will give unsecured loans with the unsecured personal loan interest rate to homeowners, provided that they meet the requirements they set forth. As a general rule, those with bad credit wouldn't even need to bother checking out percentages, but there actually are lenders who feel that those with bad credit deserve a second chance and will give them lending without collateral as well. The percentage can be a lifesaver to those people as long as better financial practices are developed and timely payment made. If they follow those guidelines they will be on the road to better credit. The unsecured personal loan interest rate can be an expedient resource with God's help. Borrowers should always trust in Him to lead them to the right decision. "It is better to trust in the LORD than to put confidence in princes" (Psalm 118:9).