Unsecured loans are those loans granted by the lender without any collateral. In secured loans, the lender has a lien on some asset belonging to the borrower – property, in case of a mortgage, or a car in case of a car loan. In case of an unsecured loan, the lender has no lien but only a promise from the borrower that he would repay the money.
Unsecured loans are usually of small amounts and can be used for various purposes. The amount could be used to fund a holiday, purchase of an electronic item, house repair and so on.
The easiest way to get the best loan rates is to search online. There are many lending websites which show comparative loan rates for unsecured loans.
Another method of getting the best loan rates – unsecured loans is to call or visit various lenders and get information regarding their rate of interest, repayment period and such other details. One can then tabulate and compare the data gathered and select a suitable lender.
The borrower should keep in mind that personal loans carry a higher interest rate than loans with collateral as they pose a higher risk to the lender.