The unsecured loan is a loan from a creditor institution (a bank or a financial institution) and characterized by the absence of collateral of a real nature (pledge or mortgage). In other words, and without prejudice to the necessary simplifications, this is a loan in which only the signature of the applicant is required as a substantial “guarantee” of solvency.
What are unsecured loans available?
Without prejudice to the above, the unsecured loan is similar to any personal loan, to a transfer of one fifth of the salary or pension, or to an honor loan: technical forms which, with the exception of infrequent exceptions, are free of guarantees of real nature.
The unsecured loan (in this case the main guarantee is represented by the existence of an immediately enforceable debt) and the finalized loans (those that are intended for the purchase of small assets, are also included within the unsecured loans. They are usually brokered directly by the retailer who sells the asset being financed).
Unsecured loan, the signature is sufficient
On the basis of the above, we can therefore summarize again the concept that in the unsecured loan the only guarantee required by the bank is the “signature” of the applicant or guarantor, which in turn will provide the credit institution with sufficient reassurance of solvency through the presentation – during the preliminary investigation – of documentation capable of proving one’s income.
How much to get with an unsecured loan?
Being unsecured in being able to lend less than the mortgage loan to the lender, the unsecured loan is generally granted by the lender for smaller amounts than the collateral mortgage. This does not mean, however, that the amount obtainable is low: although the limit is generally equal to 20 or 30 thousand dollars (depending on the preferences of the credit institution), there are certainly not few loans available on the Italian banking system, with request limits of 50 or 100 thousand dollars.
How long does it take to repay the unsecured loan?
The unsecured loan is repaid within an extended amortization plan typically within 72 months. However, there are also unsecured loans on the market with repayment periods of up to 10 years. In any case, the limit terms of unsecured loans can hardly be compared to those of mortgage loans.
Unsecured loan: fixed or variable rate?
The unsecured loan can be disbursed at a fixed or variable interest rate, depending on customer preferences. However, it should be remembered that in some cases (think of finalized loans or assignments of one fifth of salary or pension), the only technical form available is the fixed rate one.
In summary, unsecured loans are loans of a personal nature disbursed only after the “signature” of the applicant and the guarantor. However, there are no guarantees of a real nature such as pledges and mortgages. Generally granted at a fixed rate, for amounts not exceeding 30 thousand dollars, and for maximum durations of 5-6 years, they are the most common and common form of bank loans.