consumer loans without collateral

For a lot of people, loans are a difficult subject to tackle.  There’s not a whole lot of education out there about them and how they work outside of “hey, you’ll probably need these at some point.”  Sure, we might get taught the equations for calculating interest, but in a vacuum, that’s not very helpful.

The point is, we all deserve to have a better idea of what they are and how they work when we decide to apply.  Otherwise, it can be pretty difficult to try to find the best type of consumer loan that doesn’t have collateral, sometimes referred to as an “unsecured” one.  As far as interest rates, we won’t be covering them too extensively here, so you may want to check out a resource like this one before you continue.  

How it all Works

Perhaps the most difficult thing to figure out when first starting out on your financial journey is how loans work in the first place.  Instead of explaining it to us, a lot of the time we’re just expected to understand them right off the bat.  Of course, this works a bit differently depending on where you live.

For instance, in North America, often you’re saddled with huge student loans fresh at eighteen with very little context and information about the ramifications of borrowing that money.  Naturally, in a place like Norway, that’s not really going to be the case.  Still, a lot of people in general end up going into debt without a full grasp of how credit agreements work.

When we borrow money from a lender, there is always going to be an expectation that we’ll be paying that mount back in full.  In fact, there will usually be an additional charge thanks to interest rates, as was mentioned above.  Typically, it’ll be in the form of a monthly payment, and there will be a pre-determined length of time that you’ll be responsible for them.

The longer the term of the loan, the more interest that you’ll end up paying.  So, it’s pretty important to be paying attention to that as you submit applications and consider which one that you want to accept.  The other thing that’s important to think about is the difference between “secured” and “unsecured” loans.


These days, the unsecured ones are much more popular than secured ones.  Essentially, the difference between them is whether or not there is collateral involved in the terms of the agreement.  You can find an example of them here, forbrukslåån/ which showcases some consumer loans that don’t require collateral.

Now, if you don’t know what collateral is, it’s also pretty simple to get a handle on.  Basically, collateral is something that a lender takes in return if a borrower isn’t able to repay them.  So, if there’s a default on a loan, whatever the collateral is ends up in possession of the lender.  It’s something that not a lot of people want to deal with anymore, so for consumer loans, it’s gone out of fashion for the most part.


None of this is to say that there aren’t secured loans at all, anymore.  In fact, mortgages and auto loans are both under this umbrella, and a lot of people take them out each year to purchase a home or a vehicle.  However, they’re some of the only ones that remain.

Pawn shops are also an example of sorts here, although again, they’re not as popular anymore.  Additionally, a lot of them have started taking a different approach rather than the lending model.  Still, it’s worth understanding these distinctions.

Why it Matters

Perhaps you are still wondering why this is such a big deal in the first place.  That’s certainly a natural thing to question, all things considered.  However, there are several reasons why it’s important to have a firm understanding of loans, and some of them were already briefly touched upon above.

The thing is, each time that we go to make a major purchase in our lives, there’s a high chance that we’ll end up needing to take out a loan or borrow money from some form of financial institution.  Understanding all of the intricacies involved can be the difference between sinking or swimming, financially speaking.

On another note, though, knowledge of how it works can also help you to score a better deal.  In order to find the “best” one out there (that being the one that works best for your own needs, of course), you’ll need to know what you’re looking for in the first place.  Otherwise, it can get pretty confusing and difficult to navigate these spaces.

So, when you’re going to a consultation or even when you’re filling out an application for a loan, make sure that you know exactly what you’re aiming for.  While you will probably need to be prepared for some form of bargaining or the works, coming in with firm expectations is a solid game plan for sure.  

You can always talk to your financial advisor if you’re feeling stuck or get a consultation one if you don’t have one that you normally work with.  A lot of financial institutions have started to offer those sorts of services at their branches, too, which could be worth tapping into!  It’ll depend on how you decide to go about the application process, though, so bear that in mind.

Borrowing money doesn’t have to be scary or intimidating.  It’s not even a bad thing, most of the time.  So, even though “debt” seems to be synonymous with a bad word these days, that’s really not the case.  If you’re getting loans responsibly, then you don’t have anything to be concerned about on that front.

Just make sure that you’ll be able to make your repayments properly before you commit to anything.  Double check your budgets and create a game plan for the added expense, and you’ll be prepared!  Best of luck if you do decide to submit some applications!

By Jim O Brien/CEO

CEO and expert in transport and Mobile tech. A fan 20 years, mobile consultant, Nokia Mobile expert, Former Nokia/Microsoft VIP,Multiple forum tech supporter with worldwide top ranking,Working in the background on mobile technology, Weekly radio show, Featured on the RTE consumer show, Cavan TV and on TRT WORLD. Award winning Technology reviewer and blogger. Security and logisitcs Professional.

Leave a Reply

%d bloggers like this: