What Is An Unsecured Home Loan?

An Unsecured Home Loan is a loan obtained without collateral, and is based on the borrower's credit rating and ability to pay. The higher your credit score, the lower the interest rate. Of course if your credit score is low, you will get a higher rate or denied the loan.

Reasons for Acquiring an Unsecured Home Loan

People have various reasons for getting unsecured home loans. Consolidating debt, home improvements/repairs, or buying a car are the most popular.

Unsecured home loans also offer tremendous flexibility. A borrower can use the money for any reason and both homeowners and non-homeowners are eligible because the loan is not secured by any type of property.

Documents Needed for an Unsecured Home Loan

Unsecured home loans require the least number of documents, making it the fastest to be approved. Typically, financial institutions require proof of identity, residence, income and also 3 to 6 months of your bank statements. Some institutions require at least two previous years of tax returns with attached schedules for loans that exceed $30,000 and greater.

Where To Get An Unsecured Home Loan

You can get an unsecured home loan from banks, financial institutions, insurance agencies and stock firms. Do your research, ask friends and try going to your bank first to see what they have to offer. You will find that lender rates can vary from 8% to as much as 29%.