Unsecured loans today account for about 90% of the total loan market. This is not only the case in Lithuania but also worldwide. In the past, these numbers were reversed: unsecured loans accounted for only 10% of total loans. But as people’s incomes have increased and guarantees have been given that they will be stable, over time they have been increasingly provided.
Therefore, today there is not even a big difference in what type of loan will be granted. The difference will not be whether or not someone will lend one or the other. The difference will be in how expensive it will be. It is through the level of interest today that the differences between different types of loans are manifested.
However, there are also differences in repayment terms, although the gap between them is narrowing. For example, long-term collateralized loans can be issued for up to 30 years. Meanwhile, instant loans are usually issued for several months. And in some cases even as little as 30 days.
Advantages of unsecured instant loans
While unsecured instant loans are the most expensive, long-term mortgages are the cheapest without any competition. Between these two divisions are consumer loans, loan refinancing, business loans, car loans, etc. However, instant loans are the most popular and largest market share service. But can it surprise anyone? After all, people are more likely to need hundreds of euros in daily expenses than housing! The latter can cost as much as $ 200,000, and without that amount, no one will really borrow. As a result, not only do fast loans make up the largest share of total loans, but that proportion is growing! More and more people are finding instant loans and using them to plug budget holes.
Of course, there are also a number of people who do not succeed. Then comes delays in paying your credit, additional administrative costs, even more borrowing, or even bankruptcy. Although very few customers declare insolvency, a significant number of creditors are overdue. And in such cases, not only do they disappear, but they also start to increase, contributing to various penalties.
Therefore, while such unsecured quick credit is beneficial because no assets are at risk, it does not mean that the latter is inviolable. At worst, bailiffs can arrest him, and in such cases, bailiffs often look for loans.
Interestingly, such loans do not require collateral for borrowers either. Conversely, refinancing often means being able to borrow extra. And those who are in debt or, in particular, have problems with bailiffs, such opportunities are very rare.
Unsecured loans are also distinguished by the fact that, unlike other forms of borrowing, you can borrow for free or simply without paying a registration fee. We are, of course, talking about the first free credit campaign. The latter is granted exclusively in the case of fast loans without collateral. Therefore, while unsecured loans are, on average, much more expensive than others, playing your lot wisely can be borrowed not only with low-interest rates, but without them at all!
But such loans have other advantages. For example, unlike long-term loans, these can be provided online. This means you can borrow without leaving home!
Long-term unsecured loans
You think that’s all? Oh no! In the past, it was customary to think that many things – not just interest – differ in these types of loans. Today, however, unsecured long-term loans are already a reality. It is possible to borrow tens of thousands of euros for several years without any security.
In the past, this could only be done with collateral, such as mortgages. And today you can get an identical loan without risking your assets. There is only one difference: yes, you guessed it, the interest rate. Such a unsecured long-term loan can cost several or even more than ten times more expensive than an equivalent unsecured loan.
As you can see, borrowing without a deposit today is extremely easy and the loans themselves have practically no significant differences from their predecessors – long-term loans. The only difference is the interest rate. Therefore, when choosing which loan to choose from, it will usually lead to your choice of what to value – higher price or convenience and speed. After all, such emergency loans can be granted in just 15 minutes.
However, it should not be assumed that if you do not leave the deposit, you are fully protected from forfeiture. Not at all. If you are late in paying your credit or maliciously repaying your loan, you may be visited by bailiffs. And in such cases, your property is definitely not protected. Therefore, it is worth considering whether you do not want to borrow immediately, thus reducing your liabilities.