There is a lot of talk about unsecured loans. Their popularity has been greatly influenced by the ease of applying and the fast processing processes that have ensured that money can be credited to their own bank account even within the same day.
What does an unsecured loan mean in practice, and how does it differ from a secured loan. Is it possible to apply for a loan online without bank codes, and do you need attachments?
Borrow without collateral
Whether secured or unsecured, the choice between the two often depends entirely on your own situation. Sometimes the choice is not easy, and many always choose an unsecured loan without a comparison, although in some situations a secured loan might be a better option. However, there are situations where a secured loan simply fails or there is no time to apply.
Unsecured loans generally include various overdrafts and instant loans, as well as most consumer loans. In order to obtain such a loan, the applicant does not need to provide any collateral, ie property or similar ‘pledge’, which ensures that the loan will be repaid in one way or another. If the applicant is unable to repay the loan for one reason or another, he or she will be notified of default. Unsecured loans also have much higher interest rates than secured loans, as this is how the lender ensures that the contract does not disappear.
However, a properly designed and executed unsecured loan is not a risk trade. The absolute benefits of an unsecured loan are its speed and ease, which can overcome the sluggish bank loan process in a situation where money is needed right away. An unsecured loan is often also a very specific loan that can also be anticipated. For example, an applicant can submit an application before the need for money, and after the approved loan decision, withdraw the money only after a pre-determined deadline.
An unsecured loan is also suitable for those who do not like doing business with the bank, or who are reluctant to share their personal finances, for example, with small-town bank officers. An unsecured loan can often be obtained, for example, from your own online bank without any physical visits to the bank, or you can easily apply online directly from the lender’s website. An unsecured loan is also very versatile, as you can, for example, raise the loan amount in several installments, or apply for an additional loan if the need arises.
Secured loans include mortgages and larger consumer loans, for example, for the purchase or renovation of a car. As already mentioned above, the interest rate on a secured loan can often be negotiated rather low, as the lender will then be sure that the loan will be repaid. The loan is usually secured by the applicant’s property, such as a condominium or summer cottage. Applying for a secured loan takes time and effort, but if you have to set up collateral for a loan, you should take the opportunity.
Whether it is an unsecured loan or a secured loan, in both cases it is very important that the loan repayment is planned and executed in a sensible manner. No matter how small the loan, it is never worth taking it without careful consideration.
Loans without bank codes
According to the Finnish Quick Pay Act, the customer’s identity must always be identified before a loan application is approved. In this respect, therefore, bank codes play a very important part in the loan application process, and this method has become, almost without exception, a rule that every lender will adhere to.
Getting a loan without a bank code is relatively challenging these days. In some rare cases, authentication can be done without a bank code, either via SMS or mail. However, nowadays, this option is found by fewer and fewer lenders.
At the same time, the process is slow, as the customer has to call the lender’s customer service and wait for the incoming loan agreement to be signed and returned by the customer. The lender then goes through the information and, if all is well, makes an approved loan decision, transferring the money to the client’s account. However, there may easily be several days left over when the need for a bank account is almost absolute for a sudden need for money.
Borrow without attachments
All credit lenders are required to verify the customer’s financial background, as income information can be used to determine how large a loan can be granted to a customer and on what terms. Fortunately, this is not a long and cumbersome process, as income information is easily apparent from, for example, pay slips or bank statements.
Even if the loan is unsecured, lenders are likely to ask for at least the applicant’s income information. This way, they remain in the position to ensure that the applicant is able to repay within the planned time frame.
Before making a loan decision, we always recommend that you apply for a loan. You can easily and quickly apply for loans through our service, and you can get offers from over 25 different banks and lenders with just one application. We only require you to have a clean payment history (no credit interruption records) and a gross monthly income of at least $ 1200. You can apply for a loan of up to $ 100,000 up to $ 60,000, and get a loan period of up to 15 years, depending on the terms of the contract.