The unsecured loan is, so to speak, the mortgage that can be requested by those who do not own a property and consequently can not affix the mortgage on it. ” Cheirographos ” derives from the Greek and means ” handwritten “; in the case we are discussing, we are talking about a written obligation of our own hand. Prescinde, therefore, from real or material guarantees; the only guarantee remains the signature: single, double or triple depending on the number of people involved in protecting the loan. It is normally used for small amounts, for example to finance extraordinary maintenance of condominium parts, purchase of functional assets for a company, personal liquidity needs. It has a precise duration that usually does not go beyond 5 years. There are two types of possible unsecured loans:
- The unsecured loan for companies ;
- The personal unsecured loan.
Let’s take a closer look at the characteristics of this contract and the methods, as well as the necessary requirements, to request it.
What is an unsecured loan?
As anticipated at the beginning, an unsecured loan is nothing more than a loan disbursed on the basis of the applicant’s subscription, with the only income certification that accompanies the request and the signature. Examples of unsecured loans are personal ones; the loan changed and the assignment of the fifth of the salary (or pension); finalized loans, since they are destined to the purchase of small goods with installment repayment. Anything that does not fall into this category concerns, instead, loans on pledge or mortgages, which have real guarantees.
Features of the unsecured loan
This loan may be requested by both individuals and legal entities, ie companies. The one for companies is on to use the money for the purchase of goods or services useful to the company. It can last between four and six years. Presents almost all the characteristics of a normal mortgage, without obviously the real or material guarantees. On the contrary, the unsecured loan for individuals has no specific purpose: the sum of money requested can be used as is believed. Faced with this freedom of spending, however, there is a higher interest rate than usual, which is around 4% above the average. In both cases there is no mortgage ; this does not mean that the bank does not ask for guarantees. These guarantees are made up of
- Surety policies;
- Pledge on direct securities or any guarantors.
When to ask for an unsecured loan?
The conditions that lead to a request for an unsecured loan are well defined by the rules and concern the conditions of the applicant (he has no real estate to be mortgaged for example) and the use that he will make of the money. So, for example, if the amount to be requested does not exceed 75,000 euros, 120,000 in the case of companies, it will be useful to benefit from this type because the lower the amount, the less the guarantee will be offered. Another condition is the time: the duration of a loan of this type varies between 18 months and 10 years, at the discretion of the banking institutions. Another condition that may suggest the approach to this loan modality is the realization of works or restructuring of parts in common with others, see the condominiums, which are not mortgages by their nature. Lastly, this loan is used when the amount requested is so small that it does not justify the greater expenditure deriving from the mortgage registration.
The value of the signature
The lack of a real or material guarantee must not make us think that the loan is less guaranteed and the bank less protected. Thanks to the signing of the signature the applicant agrees to return the sum received giving the bank the opportunity to use a certain asset to protect the return. This means that with the signature of the applicant and possibly of the guarantor the granting of an asset is implied in case of insolvency towards which the bank can avail itself with the instrument of the attachment. The possible signature of a guarantor is itself further guarantees.
Rates and costs for access to the mortgage
The unsecured loan agreement does not deviate from a normal mortgage in terms of managing the practice. According to the provisions of the law it provides that the debtor returns the sum of money received in convenient installments. The applied interest rate can be fixed, variable or mixed. In the first case, the reference parameter is the IRS, easily available in financial newspapers. This value with the increase of the agreed spread determines the rate that will govern the duration of the loan. The variable rate, on the other hand, is based on the 3/6-month Euribor. This value is also readily available in newspapers dealing with financial topics or websites. Once again, the rate that will govern the loan is given by the increased value of the agreed spread. If you proceed with a variable rate, the conditions are the same as for mortgages in general.
As far as ancillary costs are concerned, the costs are fairly low, precisely because the cost of the mortgage registration is avoided.
Examples of use
As widely described above, an unsecured loan is normally granted under certain conditions and for a specific use of money. A private individual, or a company, can go to their bank of trust and request this type of financing, citing the personal need for liquidity, or the need to intervene with renovations on part condominiums. A large part of the use of this tool was, above all, in this last period thanks to the simultaneous diffusion of photovoltaic systems. For this type of works, the unsecured loan is the only instrument that can be adopted because it is compatible for the duration, amounts and impossibility of mortgage registration of the structures affixed to condominium parts.