There are plenty of loan options available in market but the most straightforward and uncomplicated types of loans are unsecured credit loans online, which are also known as personal loans. You can use the money of unsecured credit loans for starting your business, for increasing business cash flow or to buy an expensive asset. These are unique types of loans as these are given without any collateral.
Here in this blog post, we are discussing different types of unsecured loans:
1. Credit Cards
Credit card is nothing new for people and it is something which is already used by many people. In this type of loan, a credit card holder is provided with a credit limit according to his financial condition. He is then allowed to spend money within his credit limit which is the maximum amount of money provided by bank. It is very important to manage the use of credit cards as spending without care would lead you to pay in debt due to high-interest rate.
2. Personal Loans
Personal loan is a no-reason loan as the borrower is not obliged to mention any specific reason for taking the loan. The repayment of the loan is generally done in equated monthly installments. Banks also give the facility of prepayment in case the borrower has the money to pay before due time. But generally, banks charge the prepayment fee.
3. Payday Loans
If your financial life is based upon paycheck to paycheck every month, then payday loan would be best for your needs. This type of loan is specially made for salaried individuals and given to them only. Usually, salary slip is taken as proof and quite high interest is charged. It is also known as salary loans, payroll loans, and cash advance loans.
4. Merchant Cash Advances
Merchant Cash Advances is the easiest and quickest way to get business cash for growing and sustaining cash flow. No collateral is needed instead cash is given in exchange of daily credit and debit card sales. The approval process is entirely easy and bad credit is also accepted. Merchant cash advance is the most suitable option for small business owners with low credit rating.
Microloans are small amount of loans given by individuals instead of banks. Microloans typically range from $1,000 and $50,000, and mostly given to small business owners. In addition, microloans are not backed by any sort of collateral and mostly provided by various Small Business Administrations. It is perfect for business owners who do not require a large sum of money in bulk as loan.
It is wise to use money borrowed from unsecured credit loans online properly to avoid any chances of debt.