Unlike a mortgage where you can lose your home in case of default, the only thing that secures a personal or cash loan (usually unsecured) is your good reputation. This is what makes the loan quite attractive.
Before availing of cash loans in Ogden, however, you must weigh the pros and cons to make sure it is the right loan product for you.
- Personal Property Not at Risk – Unless you avail of a secured loan, your personal property is not at risk if you default on an unsecured cash loan in case you suddenly get laid off or unable to make timely payments.
- Simple Application Process – Getting cash loans in Ogden is a lot easier than availing of traditional bank loans. You can apply online and get approved in 1 day. All you need to do is provide proof of a stable income source. According to Loans For Less, a good credit score is an advantage.
- Lender Can Go after You in Case of Default – Although there is no collateral, if you default on your payment, the lender may put a lien on your personal property to secure payment. To do this, the lender will have to sue you, and you may be made liable to pay for court costs and attorney’s fees, in addition to late payment penalties.
- Smaller Loan Amounts with Higher Interest Rates – With unsecured loans, the risk to lenders is high. Thus, they charge higher interest rates and limit the amount of loan, especially if the borrower’s credit rating is low. They check credit reports and verify employment/source of income thoroughly.
There’s no doubt that unsecured cash loans have their pros. You can easily get approved for one, and use it for a variety of purposes. However, the loans also come with risks, including having to shoulder a higher than usual interest rate. Thus, it is important to consider both the advantages and disadvantages when considering obtaining a loan.