What do you think are the most widely processed loans today? The answer is easy since unsecured loans to people such as personal loans will always be in the first positions.
We say that it is easy to answer this question because the opposite has never happened in the financial sector.
Personal loans without collateral have always been above those signed with some guarantee such as a property.
And it is something that we know will never change because if it ever did, it would not be because of a change in the opinion of customers but because of changes in financial companies.
A person who needs money if he can will always prefer to process without endorsement than with endorsement.
Not only because he prefers to do it but it is often because he has no other option.
Unsecured loans to individuals and businesses Why is it the norm?
The first reason in my opinion is the one that has to do with the absence of guarantees or endorsements.
Many people when they want to sign a loan find that they have nothing to guarantee.
And by guarantee we are not talking about other people who can put their income as collateral but rather real assets.
One thing is the guarantors (people who provide income to the credit firm) and another thing are the guarantees or endorsements being goods such as properties or another series of goods.
Nor can we forget the fact that there are people who do not want to go to third parties to guarantee them with some good.
Because the financial companies do not require that the guarantee presented be from the person who asks for the money.
If there is a person such as a family member or friend who agrees to endorse the client, this will be enough to continue with the procedures.
The second of the reasons has to do with the speed of making the arrangements.
People mistakenly believe that secured loans are always much slower.
Consequently, if they can avoid it, they are used to signing bank loans.
We say that they are in error since although it is true that the processing through the bank in these loans can be slow, the same does not happen in other financial companies.
For example, in those that sign loans between individuals .
These financiers can, despite the guarantee, sign the loans in a very short time, unlike banks.
In many cases we can even say that signing these loans with endorsement is faster than signing personal loans.
Personal loans without collateral and how are credits based on income
If you are looking to sign personal loans, the financial companies that offer this financing will do the study based on the income you could have.
That is, they do not take into account any guarantee but instead if they look at the income that the one who asks for the money has.
Not only income, but also other credits that they may have and that affect the level of indebtedness of the person.
We will also assume that in the signing of one of these credits without endorsement , either for companies or individuals, the interest rate will be higher.
As you can see in the processing of unsecured loans to people and companies, not everything is positive.