Unsecured loans do not require collateral. They are based on the borrower’s creditworthiness and ability to repay.
- Benefits:
- Faster application and approval process compared to secured loans.
- More flexible loan terms may be available.
- Drawbacks:
- Typically higher interest rates than secured loans.
- Lower loan amounts compared to secured loans.
- Eligibility:
- Varies depending on lender.
- Good to excellent credit history is generally preferred.
- Stable income and employment history are important.
- Common Unsecured Loans in Zambia:
- Personal loans (for various purposes)
- Payday loans (small, short-term loans with high interest rates)
- Line of credit (flexible credit line with ongoing repayments)