Unsecured Loans

Archive for March 18th, 2009

Debt consolidation means taking a single loan to pay off multiple loans. This helps you in getting a lower and fixed interest rate. The consolidation loans can be of two types: Secured Consolidation Loan and Unsecured Consolidation loan. Secured consolidation is the process of consolidating loans by keeping your assets as security. The main purpose of unsecured consolidation loan is to consolidating debts by procuring an unsecured loan. This is a popular form of loan for non-homeowners, as it does not require any form of security. It is also a popular method of debt elimination. It is so common to see people getting burdened with debts, credit cards, etc. To relieve your burden of mounting debts, it is advisable to use unsecured consolidation loan.

This loan is a boon for those who do not have assets to keep as mortgage. This form of loan is readily available with all types of lenders, such as, banks, credit unions, etc. The process of acquiring unsecured consolidation loan is also very easy. You may either file an online application, as available on the websites of the various lenders or you may seek assistance of brokers. The brokers may help you negotiate the best deals available in the market. It is also helpful to use brokers in case you have a bad credit. In order to apply for this loan, you do not need many documents, except proof of employment and credit report. Many lenders also have experts on their panel, who guide you through the process of getting unsecured consolidation loan and also help you negotiate with the debt settlement process.

Who needs unsecured debt consolidation?
If you are at the verge of being bankrupt
Lender’s keep bothering you to pay off
Excessive debt

The various benefits of unsecured consolidation loan are:
No assets required as collateral
Does not require too many documents for procuring loan
Ease of applying through online mode and quicker processing
Borrower does not have to pay anything with immediate effect from the approval date as repayments start only after a specified period
Interest rates are lower than paying higher interests and late payment charges on credit cards
Payment terms can be decided as per your convenience

Please ensure that you go through the clause of APR, pre-payment penalty and repayment carefully before signing the deal. You should also be careful that you do not end up being caught in vicious circle of debt again, once you have made the settlement.

For more information about unsecured consolidation loans see Unsecured Consolidation Loan.

The U.S. small business administration (SBA) was created in 1953 as an independent agency to support and protect the interest of the small businesses. It offers various loan programs to help the small businesses, which are not able to secure loans through other channels. SBA acts as a guarantor (on behalf of the business in question) on the loan provided by all the lenders, such as, banks, Credit Unions, etc.) who wish to participate in the SBA loan programs.

The various lending programs available through SBA are:

Basic 7(a) Loan Guaranty: This loan is available to those small businesses, which are not eligible or have not been able to secure loans through normal lending channels. The loan under this program is available for a variety of business requirements, such as, working capital, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). The loan has to be repaid within 10 years for working capital loan and can be extended up to 25 years for fixed assets. These loans are always guaranteed for a certain portion of the loan amount by SBA. The lender and the SBA share the risk that a borrower will not be able to repay the loan amount.

Certified Development Company (CDC), a 504 Loan Program: This loan is meant for the small businesses who wish to acquire real estate or machinery for expansion or modernization. A 504 project usually includes a loan secured from a private-sector lender with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering a maximum of 40 percent of the total cost, and a contribution of minimum 10 percent equity from the borrower. CDC is a nonprofit organization set up to contribute towards the economic development of its community.

Microloan, a 7(m) Loan Program: It’s a new program, which offers loan up to USD 35,000 to small businesses and not-for-profit child care centers for working capital or the purchase of inventory, supplies, furniture, etc. The loan cannot be used to pay off any existing debt or to purchase real estate. The loans are not guaranteed by SBA and are available in select locations in each state.
Disaster Recovery Loans: You may be eligible to get this loan if you are living in a declared disaster area or you are a victim of disaster, even if you don’t own a business.

In addition to this, there are few special purpose loans available for the following:
Export Working Capital
Export Express
International Trade Loans
CAIP Program
Employee Trusts
Pollution Control
CAPlines

For more information about sba business loans see SBA Business Loan.