Unsecured mortgage: what it is
The unsecured loan is nothing more than a written obligation of one’s own hand: in Italian jurisprudence, in fact, creditors are considered unsecured who only place a document with their signature to guarantee the obligations that are assumed by the debtors. In other words, any type of non-mortgage loan is unsecured: this means that we are dealing with a loan for which there is no property guarantee. This is why any personal loan can be considered an unsecured loan. It remains to be understood, therefore, the reason why these mortgages are not used to buy a house, in order to avoid binding the property with a mortgage registration. The reasons are different.
The unsecured loan is generally adopted in cases where the loan has a duration of between 18 and 120 months: conditions, of course, vary according to the banks. It is also chosen when the purpose of the loan is to financially support the construction of works which – as for example in the case of condominiums – involve areas or parts that are shared with other people and therefore could not be mortgaged.
It is customary to resort to unsecured loans, then, for figures that do not exceed 75 thousand USD (or 120 thousand USD, when it comes to businesses and not to individuals). The reduction in the amounts that can be granted can be directly linked to the fact that the guarantee that is given is weaker. In conclusion, it can be said that this mortgage is fine whenever the amount to be financed does not lead to bet on a mortgage registration, which would result in higher costs.
Who can request it
There are no particular limitations regarding the subjects who have the possibility to apply for the unsecured loan, which can be granted to both companies and individuals (but it is worth reiterating that, between one credit institution and another, there may be significant differences from the point of view of the guarantees requested: in short, it is true that no mortgage on the properties is registered, but this does not imply that guarantees cannot be requested from the bank).
Guarantees and interest rates
The guarantees that a bank can request for the subscription of an unsecured loan can be of various types: ranging from surety policies to bills of exchange, passing through pledges on direct securities. As far as interest rates are concerned, they are – as you can imagine – much higher than those foreseen for mortgage loans: on the other hand, these are loans with a certain dose of risk (precisely for the no mortgages) and therefore it is normal that they are higher, comparable to the rates of personal loans.
To give some numbers, the APR can go up to 12%. For this reason, it is advisable to evaluate their real convenience carefully and thoroughly, also with a comparison with other forms of financing.
In short, the unsecured loan – which must not be confused with the loan changed – can prove to be a rather convenient form of financing, as well as convenient, also due to the almost total absence of constraints that characterizes it. In recent years, it has been chosen with some frequency by those who purchased or installed photovoltaic systems, as it had characteristics compatible with this type of structure.