If you are living paycheck to paycheck, you may not have any assets with which to secure a loan. At such times, what you need to look for are No Collateral Loans.
What Are No Collateral Loans?
These are loans based on your ability and willingness to pay. They are typically called personal loans or signature loans.
In contrast, loans that are secured by collateral are also based in part on the value of the collateral. A secured loan or loan with collateral means that the loan is tied to something of tangible value that the lender can repossess and sell to help cover their losses should you fail to pay them on time and in full.
Some examples of loans that involve collateral include:
- Pawning small valuables, such as gold jewelry.
- Title loans.
- Car loans.
How Do No Collateral Loans Work?
Because No Collateral Loans are based on ability and willingness to pay, the lender needs information concerning both of those elements. The first part — ability to pay – will take into consideration both your total income and your obligations, such as rent and other debts. The second part — willingness to pay – will look at your financial history to see how consistently you pay your bills.
Here are a few examples of No Collateral Loans:
Generally speaking, conservative lenders do not want your combined obligations to exceed 40 percent of your income. This includes both housing costs, such as your rent or mortgage payments, and other debts, such as car payments, credit card debts and student loans.
What Is Involved In Applying For No Collateral Loans?
In order to apply, you need to be a legal adult. You also need to be either a citizen of the US or a legal resident.
Next, you need to provide identification, such as military ID card, driver’s license or state issued ID card. You also need to provide some financial information showing ability to pay, such as a recent bank statement or pay stub (LES if you are military).
Depending on the size and type of loan, they may run a hard credit check or a soft credit check. Soft credit checks tend to be used for loans involving small amounts of money which you want quickly, such as for a payday loan. Hard checks are reserved for larger commitments and stay on your record for up to two years.
Apply Now For A No Collateral Loan.
You can apply online right now with TheGuaranteedLoans. We serve as a matching service to help make the loan process as hassle-free as possible.
Have you gathered together a few documents, like ID and a bank statement? If so, you can get started on your application by clicking the button below.