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What Is an Unstructured Personal Loan?

What Is an Unstructured Personal Loan?

Dollars & Sense Finances
SouthEast Bank| May 6, 2024
What Is an Unstructured Personal Loan?

Seeking loans to help consolidate debt and cover everyday expenses has become more and more common in the last year. Considering the rate of inflation and the relative ease of acquiring loans through digitally-based companies, it’s no wonder why over 22 million Americans have one or more personal loans to their name.

There are various options available in the market for personal loans. One such option is an unstructured personal loan, sometimes called signature loans. But what exactly is an unstructured personal loan, and how does it differ from other types of loans?

Key Features of Unstructured Personal Loans

Bottom line: an unstructured personal loan is a type of loan that does not require collateral. Unlike a secured loan, where an asset (such as a car or a house) is used as collateral, an unstructured personal loan is granted based solely on the borrower’s creditworthiness and income. This makes it a popular choice for individuals who may not have valuable assets to pledge as collateral.

Here are some other key features of unstructured personal loans:

The Pros & Cons of Unstructured Personal Loans

Unstructured personal loans offer both advantages and disadvantages for borrowers to consider:

These types of loans are not administered freely, but your successful qualification doesn’t necessarily an unstructured personal loan is the best fit for your financial situation. It’s essential to carefully evaluate your needs, financial capabilities, and the terms of the loan before making a decision.

Final Considerations

Personal loans can be a great financial strategy for achieving realistic short-term goals. So, if you have a good credit score and stable income, unstructured personal loans could be a viable option for you. While it provides several benefits, it’s crucial to evaluate the interest rates and repayment terms before making a decision. Consider speaking with a financial advisor who can provide personalized guidance based on your circumstances and needs.

Have more questions about unstructured loans? Wondering if one may be a good fit for your needs or goals? At SouthEast Bank, we want to help! Visit your local branch or fill out an initial interest form to receive assistance from our team.