Mogo Personal Loan
Borrow up to $35,000
- Same day funding
- Free credit score + monitoring
- Complimentary fraud protection
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Unsecured personal loans let you borrow a lump sum of cash without having to put up collateral to secure your loan. The upside of these loans is that you won’t have to risk losing an asset such as your home or vehicle if you default on your payments. The downside is that you’ll typically need a good to excellent credit score to qualify, especially if you want competitive interest rates.
Unsecured personal loans are loans that let you borrow money based on your credit score. Unlike secured loans, they don’t require you to put up any kind of collateral to secure your loan. This means you won’t lose any of your assets if you can’t make your repayments. However, your credit score will be negatively affected if you default on your loan.
Unsecured loans are typically paid back in monthly installments over a specified period of time. You’ll usually need a good to excellent credit score to qualify if you want to get competitive interest rates. You’ll also typically need to settle for higher rates than you might get with a secured loan since your lender will need to take on more risk to finance you.
Unsecured personal loans work just like any other installment loan. Your lender will ask you to fill out an application for your loan and check your credit score. Once you get approved to borrow money, you’ll get a lump sum of cash deposited into your bank account. You can spend that money however you want as soon as it’s deposited.
You’ll also need to start making repayments as soon as you get your money, even if you don’t spend it straight away. You’ll also have to pay interest on the full amount that you borrow – which can cost you hundreds or thousands of dollars more than your principal loan amount. You should make sure to factor these costs into your budget.
The main difference between secured and unsecured loans comes down to how you apply for them and what happens if you default on your payments.
Vincent wants to take out an unsecured loan to renovate his new apartment. He needs around $5,000 to purchase supplies and pay an electrician to update some wiring. He starts by taking a look at his credit score – which sits at 720. This puts him in a good position to apply for a loan. He compares three different lenders to find the best deal.
Total upfront fees
Total interest over 5 years
Total repayment amount
After comparing a number of variables, Vincent decides to go with Lender A. With this option, he’ll have to pay his loan back over a longer period of time than he would with Lender B or C. That said, his payments will be more affordable in the long run and he’ll get a better customer experience than he might by choosing one of the other two lenders.
You can easily apply for an unsecured loan by following these steps:
To qualify for an unsecured personal loan, you may need to meet the following eligibility requirements:
Before you apply for an unsecured personal loan, you should carefully think about whether you can truly afford to take on more debt. To start, you might benefit from making a budget to see how much income you have to spare each month. This number should sit below the amount you’ll be required to put down for your monthly payments.
It’s important to be aware that if you default on your loan payments, you’ll take a significant hit to your credit score. This could make it harder for you to qualify for credit in the future. It could also lead you into a cycle of debt that’s difficult to get out of. That’s why it’s important to assess not only if you’re eligible but if it makes financial sense for you to apply for an unsecured loan.
Taking out an unsecured personal loan can help you get access to the money you want to borrow without having to put up an asset as collateral. That said, you’ll usually need to have a decent credit score to apply and your credit could take a big hit if you default on your payments. Find out more about how unsecured loans work and apply today to get started.
Use an unsecured debt consolidation loan to combine your debts into one, paying a lower interest rate and taking advantage of more favourable loan terms.
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