Based on checking the website, AmericanUnsecured.com positions itself as a service that connects individuals with potential lenders for unsecured personal loans and small business loans, ranging from $1,000 to $150,000. While it presents itself as a “NO FEE service” that considers “All Credit,” it’s crucial to understand that the core offering involves interest-based loans.
From an Islamic perspective, engaging in interest-based transactions, known as Riba, is strictly forbidden.
This prohibition is not merely a suggestion but a fundamental principle, as Riba is considered a major sin due to its exploitative nature and its potential to create economic inequality and hardship.
The website explicitly mentions “APR” Annual Percentage Rate and “interest rate” examples, with APRs ranging from 5.74% to 35.99%. This clearly indicates that any loan facilitated through this platform would involve interest, which makes such transactions impermissible.
The Quran and Sunnah strongly condemn Riba, emphasizing its destructive impact on individuals and society.
Instead of seeking solutions that involve interest, individuals facing financial needs should explore Islamic finance alternatives, such as Qard Hasan a benevolent loan with no interest, Murabaha cost-plus financing, or Musharakah/Mudarabah profit-sharing partnerships, which are designed to be ethical, fair, and free from exploitation.
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AmericanUnsecured.com Review & First Look
Based on an initial review of the AmericanUnsecured.com website, it presents itself as a streamlined platform designed to connect potential borrowers with lenders offering unsecured personal and small business loans.
The homepage prominently features a “Get Started Now!” call to action, alongside claims of serving “Over 22,788,841 applications.” It emphasizes key selling points such as “No Collateral Required,” “No Fee Service” from their end, and “All Credit Considered.”
However, a deeper dive into the fine print reveals the fundamental nature of the service: facilitating interest-based loans. The site’s disclaimer section clearly outlines the concepts of Annual Percentage Rate APR, interest rates, and origination fees. For instance, it provides an example of a $30,000 loan with a 20% interest rate, resulting in a total payback of $36,000, making the yearly interest amount $6,000. Such explicit examples highlight the core issue: the involvement of Riba.
- Website Design: The site features a clean, professional design with a clear focus on loan application.
- Stated Purpose: To connect borrowers with lending partners for unsecured loans.
- Trust Signals: Displays a “McAfee Secure” certification, though this pertains to website security, not the permissibility of the financial products.
- Loan Amounts: Advertises loan options from $1,000 to $150,000.
While the website aims to simplify the loan search, the presence of interest makes its offerings problematic from an Islamic finance perspective.
The service acts as an intermediary for transactions that involve Riba, which is inherently forbidden.
AmericanUnsecured.com Cons
Given that AmericanUnsecured.com facilitates interest-based loans, the primary “cons” from an ethical and Islamic perspective are profound and far-reaching.
These concerns outweigh any perceived convenience or accessibility the platform might offer.
- Involvement in Riba Interest: This is the most significant drawback. The entire premise of the service relies on connecting individuals with lenders who charge interest. The website explicitly states APRs ranging from 5.74% to 35.99%, which are clear indicators of interest. From an Islamic standpoint, engaging in Riba is a grave sin, leading to severe spiritual and worldly consequences. The Quran warns against Riba, stating in Surah Al-Baqarah 2:275, “Allah has permitted trade and forbidden interest.”
- Potential for Debt Cycles: While aiming to provide solutions, unsecured loans with high APRs, especially for those with less-than-perfect credit, can easily lead to a cycle of debt. The examples provided on the site illustrate how a significant portion of the repayment is pure interest. For instance, a $10,000 loan over five years at an 8% interest rate with a 3% origination fee totals $12,165.60 in repayment, with a substantial portion being the cost of interest.
- Impact on Credit Score: The website discloses that “When third parties check your credit score, it can lower your credit score.” While some partners may use alternative providers, hard inquiries can negatively impact a borrower’s credit standing, potentially hindering future financial endeavors.
- Late Payment and Non-Payment Penalties: AmericanUnsecured.com clearly outlines the implications of late payments and non-payment, which include “additional fees and interest” and negative reports to credit bureaus. These penalties can exacerbate financial difficulties for borrowers already struggling.
- Lack of Direct Lending: The platform is not a direct lender. It acts as a connector, meaning users must still navigate the terms and conditions of third-party lenders. This adds a layer of complexity and potential unpredictability regarding the final loan terms.
- Privacy Concerns Data Sharing: By submitting information, users consent to it being “shared with third parties for the purpose of facilitating your request.” While common, this raises concerns about data privacy and how widely personal financial information might be disseminated.
- No Guarantee of Approval: Despite connecting users, the website states, “providing your information on this website does not guarantee an approval with said products or services.” This means time and effort might be expended without a favorable outcome.
These “cons” highlight why services like AmericanUnsecured.com, while appearing to offer quick financial access, carry substantial risks and impermissibility from an Islamic perspective due to their interest-based nature.
AmericanUnsecured.com Alternatives
Instead of resorting to interest-based loans, which are forbidden in Islam, individuals facing financial challenges have several permissible and ethical alternatives.
These alternatives align with Islamic principles of justice, mutual cooperation, and avoiding exploitation.
- Qard Hasan Benevolent Loan: This is a loan given purely for the sake of Allah, without any interest or additional charge. The borrower repays only the principal amount. While typically offered by individuals or Islamic charitable organizations, it’s the purest form of debt in Islam.
- Actionable Step: Reach out to family, friends, or local Islamic charities and benevolent societies who may offer Qard Hasan for genuine needs.
- Islamic Banks and Financial Institutions: Many countries, including the United States, have Islamic banks or financial institutions that offer Sharia-compliant products. These include:
- Murabaha Cost-Plus Financing: For purchasing assets like cars or homes. The bank buys the asset and sells it to the customer at a pre-agreed profit margin, spread over installments.
- Ijarah Leasing: An Islamic leasing contract where the bank purchases an asset and leases it to the customer for a fixed period, with ownership potentially transferring at the end.
- Musharakah Partnership: A joint venture where both parties contribute capital and share profits and losses according to pre-agreed ratios. Suitable for business financing.
- Mudarabah Trustee Financing: One party provides capital, and the other manages the business. Profits are shared, but losses are borne by the capital provider unless due to negligence of the manager.
- Takaful Islamic Insurance: An alternative to conventional insurance, based on mutual cooperation and donation, where participants contribute to a fund to cover each other against specific risks.
- Zakat, Sadaqah, and Charitable Aid: For those in dire need, seeking assistance from Zakat funds obligatory charity for eligible Muslims or general Sadaqah voluntary charity is a permissible option. Islamic charitable organizations often have programs to assist individuals facing financial distress.
- Data Point: According to ISPU Institute for Social Policy and Understanding, American Muslims contributed $4.3 billion to charity in 2020, with a significant portion going to religious and humanitarian causes, much of which is Zakat or Sadaqah.
- Microfinance Programs Sharia-Compliant: Some organizations offer microfinance loans specifically designed to be interest-free, aimed at empowering individuals to start small businesses or become self-sufficient.
- Budgeting and Financial Planning: A fundamental step is to critically assess one’s financial situation, create a strict budget, cut unnecessary expenses, and explore ways to increase income.
- Tip: Utilize free budgeting apps or spreadsheets to track income and expenditure meticulously.
- Community Support Systems: Local mosques and community centers often have welfare committees or a network of individuals willing to provide interest-free loans or direct assistance to members in need.
- Example: Many mosques maintain a benevolent fund for congregants facing temporary financial hardship.
- Government Aid and Social Programs: Depending on the specific situation, various government assistance programs e.g., housing assistance, food stamps, unemployment benefits can provide a safety net.
These alternatives not only provide a permissible path to financial stability but also reinforce the Islamic values of social justice, mutual support, and responsible financial stewardship, moving away from systems built on interest and potential exploitation.
How to Navigate Potential Obligations Arising from AmericanUnsecured.com If Applicable
If an individual has already engaged with AmericanUnsecured.com and potentially taken an interest-based loan, the focus shifts to minimizing further transgression and seeking repentance.
While the initial act of entering an interest-based contract is forbidden, Islamic scholars generally advise fulfilling the existing obligation to avoid greater harm e.g., breach of contract, legal repercussions, worsening credit score and to maintain one’s reputation.
- Prioritize Early Repayment: The best course of action is to pay off the interest-bearing loan as quickly as possible to minimize the amount of Riba accrued.
- Actionable Step: Create an aggressive repayment plan. Consider reducing discretionary spending, finding additional income sources, or selling non-essential assets to generate funds.
- Avoid Further Interest-Based Debt: Commit to never taking another interest-based loan. This is a crucial step in repentance and adherence to Islamic financial principles.
- Strategy: Build an emergency fund to avoid future reliance on high-interest loans. Aim for 3-6 months of living expenses in an easily accessible savings account.
- Seek Knowledge and Guidance: Educate oneself on Islamic finance principles to understand the severity of Riba and how to avoid it in future transactions. Consult with knowledgeable Islamic scholars for specific advice on one’s situation.
- Resource: Read books, attend seminars, or watch online lectures on Islamic economics and finance.
- Make Sincere Repentance Tawbah: Seek Allah’s forgiveness for engaging in interest. This involves acknowledging the sin, regretting it, resolving not to repeat it, and striving to rectify past wrongs.
- Spiritual Practice: Engage in sincere prayer Du’a and increased acts of worship Ibadah.
- Explore Halal Refinancing Options: If available and feasible, consider refinancing the loan with a Sharia-compliant financial institution, if such a product exists for personal loans in your region. This would involve converting the interest-based debt into a permissible one, such as a Murabaha or Ijarah contract. However, such options for personal, unsecured loans are rare in conventional markets.
- Understand Terms of Cancellation: The website describes itself as a “NO FEE service” to connect borrowers. This implies there’s no direct “subscription” to cancel with AmericanUnsecured.com itself, as their service is primarily the connection. If you have signed a loan agreement with a lender found through AmericanUnsecured.com, you would need to refer to that lender’s specific terms for early repayment or cancellation, not AmericanUnsecured.com.
- Important Note: Early repayment typically incurs no penalty for interest-based loans in the US, but always verify with the lender’s loan agreement.
By taking these steps, an individual can strive to mitigate the negative consequences of engaging with interest-based systems and realign their financial practices with Islamic teachings.
Understanding Loan Mechanics Facilitated by AmericanUnsecured.com
While AmericanUnsecured.com is a connecting service and not a direct lender, understanding the mechanics of the loans it facilitates is crucial, especially concerning the inherent interest Riba. The website’s disclosures provide a clear picture of how these conventional unsecured loans operate.
- Unsecured Nature: The loans do not require collateral, meaning borrowers do not pledge assets like a home or car to secure the debt. This can be appealing but often comes with higher interest rates due to increased risk for the lender.
- APR Annual Percentage Rate: The APR is the total cost of borrowing money for one year, expressed as a percentage. It includes the interest rate and any additional fees, such as origination fees.
- Quoted Range: AmericanUnsecured.com states APRs from 5.74% to a maximum of 35.99%. This wide range indicates that individuals with lower credit scores are likely to face significantly higher costs.
- Example Calculation: The site provides an example: “If you take a $10,000 loan for a five year term at 8% interest rate with a 3% origination fee, you would receive $9,700 $10,000 less the $300 origination fee and would make sixty monthly payments of approximately $202.76 which equates to an APR of 8.69%. The total cost of the loan would be $12,165.60.” This clearly demonstrates how interest and fees inflate the total repayment amount.
- Origination Fees: These are one-time fees charged by lenders for processing a loan application. The website states these fees “may also be deducted from your loan proceeds.” This means if you are approved for a $10,000 loan with a 3% origination fee, you might only receive $9,700, but you will still be repaying $10,000 plus interest.
- Impact: Origination fees effectively increase the true cost of borrowing beyond the stated interest rate.
- Repayment Terms: The loans have repayment terms ranging from twelve to a maximum of eighty-four months 1 to 7 years. Longer terms generally mean lower monthly payments but result in significantly more interest paid over the life of the loan.
- Credit Checks: Lenders may perform credit checks, including inquiries with major credit bureaus Equifax, Transunion, Experian or alternative providers Teletrack, DP Bureau. The website acknowledges that hard inquiries can lower credit scores.
- Implications of Late and Non-Payments: The site clearly warns of “additional fees and interest” and potential negative reports to credit bureaus for late payments. Non-payment can lead to “additional fees and interest and collection costs” and further damage to credit scores. Lenders are expected to comply with fair collection practices as per federal and state laws.
Understanding these mechanics reveals the full extent of interest and fees involved, reinforcing why such conventional loan products are problematic from an Islamic finance perspective.
The goal is always to avoid Riba, regardless of its form or percentage.
AmericanUnsecured.com Pricing Model Connecting Service vs. Lender Fees
AmericanUnsecured.com explicitly states, “We are a NO FEE service and AmericanUnsecured.com will never attempt to charge you at any time.” This means that as a connecting platform, AmericanUnsecured.com itself does not charge applicants for using its service to find a potential lender. Their revenue model likely relies on referral fees from the lending partners they connect users with.
However, it is crucial to differentiate this from the fees and interest charged by the actual lenders once a loan agreement is executed. This distinction is paramount, especially when considering the Islamic prohibition of Riba.
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AmericanUnsecured.com’s Stated Fee Policy:
- No Application Fees: The platform itself does not charge fees to apply or be connected with lenders.
- No Brokerage Fees: There’s no direct fee from AmericanUnsecured.com for their matching service.
- Free Information: They claim to provide “free information and discounted services to help you save time.”
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Lender-Imposed Costs The Critical Point:
- Annual Percentage Rate APR: As discussed, this is the true cost of the loan, including interest and fees. AmericanUnsecured.com discloses that APRs can range from 5.74% to 35.99%. This is the fundamental element of Riba.
- Interest Rate: The percentage charged on the principal loan amount.
- Origination Fees: A one-time fee charged by the lender for processing the loan. The website mentions these can be deducted from the loan proceeds. For example, a 3% origination fee on a $10,000 loan means you receive $9,700 but owe interest on the full $10,000.
- Late Payment Fees: Penalties for delayed payments, which can add further to the debt.
- Non-Payment/Collection Costs: Additional charges and costs incurred if the loan defaults.
The “no fee service” claim by AmericanUnsecured.com refers only to their intermediary role. It does not negate the fact that any loan facilitated through their connections will inherently involve interest and various fees charged by the actual lenders, making such financial products impermissible in Islam. The transparency about APR and origination fees on their website serves as a clear warning about the interest-based nature of the underlying financial products.
AmericanUnsecured.com vs. Islamic Finance Solutions
When comparing AmericanUnsecured.com with Islamic finance solutions, the fundamental difference lies in their ethical and moral foundations, specifically regarding the concept of interest Riba.
AmericanUnsecured.com Conventional Interest-Based Loans:
- Foundation: Operates within the conventional financial system where charging and paying interest is the norm.
- Core Mechanism: Connects borrowers to lenders offering unsecured personal loans and small business loans that explicitly involve APR, interest rates, and origination fees.
- Risk Allocation: Typically transfers most of the risk to the borrower, who is obligated to repay the principal plus interest regardless of the outcome of their endeavors e.g., if a business loan doesn’t succeed.
- Economic Impact: Contributes to a debt-based economy, which can lead to wealth concentration, financial instability, and economic inequality, as highlighted by Islamic economic principles.
- Spiritual Permissibility: Forbidden Haram in Islam due to the involvement of Riba. This is the primary and overarching concern.
Islamic Finance Solutions e.g., Murabaha, Ijarah, Musharakah, Qard Hasan:
- Foundation: Based on Sharia principles, which prohibit interest Riba, uncertainty Gharar, and gambling Maysir, and emphasize ethical, socially responsible, and asset-backed transactions.
- Core Mechanism:
- No Interest: All transactions are interest-free. Instead, they involve profit-sharing, leasing, or mark-up on asset sales.
- Asset-Backed: Often involve tangible assets. For example, in Murabaha, the bank buys an asset and sells it to the customer at a profit. in Ijarah, the bank leases an asset.
- Risk Sharing: Encourages shared risk and reward between parties. In Musharakah or Mudarabah, profits are shared, and losses are shared or borne by the capital provider.
- Qard Hasan: Benevolent loans are repaid without any additional charge.
- Economic Impact: Aims to create a just and equitable economic system, promoting real economic activity trade, production, wealth distribution, and discouraging speculative practices.
- Spiritual Permissibility: Permissible Halal in Islam, as they adhere to Sharia guidelines.
Key Differences Summarized:
Feature | AmericanUnsecured.com Conventional | Islamic Finance Solutions |
---|---|---|
Core Principle | Interest Riba | No Interest Riba-free |
Cost Structure | APR, Interest Rates, Origination Fees, Late Fees | Profit Margins, Lease Rentals, Shared Profits/Losses, No Additional Charge Qard |
Transaction Type | Loan of money | Asset-backed transactions, Partnerships, Benevolent Loans |
Risk Bearing | Primarily borrower bears risk of repayment | Shared risk and reward, or principal-only repayment Qard |
Ethical Stance | Profit maximization often paramount | Justice, fairness, social responsibility, ethical conduct |
Islamic Permissibility | Forbidden Haram | Permissible Halal |
The comparison clearly illustrates that while AmericanUnsecured.com offers a pathway to conventional loans, Islamic finance provides a distinct and permissible alternative that aligns with ethical and spiritual values.
For a Muslim, the choice is clear: prioritize Sharia-compliant solutions over interest-based ones.
Building Financial Stability through Islamic Principles
Instead of relying on interest-based loans, which are forbidden in Islam and can lead to financial distress, embracing Islamic financial principles offers a sustainable and ethical path to financial stability.
This approach emphasizes responsible management, earning through permissible means, and mutual cooperation.
- Earning Halal Income: Ensure all sources of income are permissible Halal. This means avoiding professions or businesses that involve Riba, gambling, prohibited goods like alcohol or pork, or deception.
- Statistic: A study by DinarStandard estimated the global Islamic economy to be worth $2.3 trillion in 2021, showcasing the vast opportunities in Sharia-compliant industries.
- Prudent Spending and Budgeting: Live within your means and practice moderation in spending. Create and stick to a detailed budget that tracks income and expenses.
- Tool: Use budgeting apps or simple spreadsheets to monitor cash flow and identify areas for saving.
- Strategy: Prioritize needs over wants. Distinguish between essential expenses food, shelter, utilities and discretionary spending.
- Saving and Investing Halal:
- Emergency Fund: Build a robust emergency fund to cover at least 3 to 6 months of living expenses. This acts as a buffer against unexpected financial shocks, reducing the need for emergency loans.
- Halal Investments: Invest savings in Sharia-compliant instruments. This includes:
- Islamic equity funds that invest in companies meeting ethical criteria e.g., no involvement in alcohol, tobacco, conventional banking, or gambling.
- Sukuk Islamic bonds, which are asset-backed and represent ownership in tangible assets rather than debt.
- Direct investments in Halal businesses.
- Avoiding Debt Especially Riba-Based: The ultimate goal is to live debt-free. If debt is necessary, prioritize Qard Hasan interest-free loans from family, friends, or benevolent societies.
- Prophetic Teaching: The Prophet Muhammad peace be upon him sought refuge from debt in his supplications, highlighting its potential burden.
- Giving Charity Zakat and Sadaqah: Fulfilling the obligation of Zakat annual obligatory charity and giving voluntary Sadaqah purifies wealth and attracts blessings. It also strengthens community bonds and supports those in need, fostering a society where fewer individuals resort to exploitative financial systems.
- Impact: Zakat systems can alleviate poverty and provide a safety net, potentially reducing the demand for conventional loans.
- Seeking Knowledge and Continuous Learning: Continuously educate oneself on Islamic financial literacy, understanding permissible transactions, and recognizing impermissible ones.
- Resource: Attend workshops, read books on Islamic finance, and consult with knowledgeable scholars.
By implementing these principles, individuals can establish a foundation of financial stability that is not only robust but also spiritually rewarding, completely avoiding the pitfalls of interest-based systems like those facilitated by AmericanUnsecured.com.
This holistic approach emphasizes self-reliance, community support, and reliance on Allah.
Frequently Asked Questions
What is AmericanUnsecured.com?
AmericanUnsecured.com is an online platform that connects potential borrowers with a network of third-party lenders offering unsecured personal loans and small business loans.
It acts as an intermediary service, not a direct lender.
Is AmericanUnsecured.com a direct lender?
No, AmericanUnsecured.com is not a direct lender.
It is a matching service that facilitates connections between individuals seeking loans and various lending partners.
What types of loans does AmericanUnsecured.com help with?
AmericanUnsecured.com primarily helps users find unsecured personal loans and small business loans. Alertwatch.ie Reviews
These loans do not require collateral like a house or car.
What are the loan amounts available through AmericanUnsecured.com’s network?
The website states that users may qualify for loan amounts ranging from $1,000 to $150,000 through its lending partners.
Does AmericanUnsecured.com charge a fee for its service?
No, AmericanUnsecured.com explicitly states it is a “NO FEE service” and will not charge users for connecting them with lenders.
Their revenue model likely comes from referral fees paid by their lending partners.
What is the typical APR range for loans found through AmericanUnsecured.com?
The website states that the Annual Percentage Rate APR for loans offered by its lending partners typically ranges from 5.74% to a maximum of 35.99%. Ebeautifulme.com Reviews
What is an origination fee, and do loans found through AmericanUnsecured.com have them?
Yes, loans found through AmericanUnsecured.com’s partners may include an origination fee.
This is a one-time fee charged by the lender for processing the loan, and it may be deducted from the loan proceeds.
Can I get a loan through AmericanUnsecured.com if I have bad credit?
AmericanUnsecured.com states, “All Credit Considered,” indicating that their network of lending partners may have options for individuals with various credit standings, including those with less-than-perfect credit.
How long are the repayment terms for loans facilitated by AmericanUnsecured.com?
The website indicates that repayment terms can range from twelve months 1 year to a maximum of eighty-four months 7 years.
Does applying through AmericanUnsecured.com affect my credit score?
Applying through AmericanUnsecured.com might involve lenders performing credit checks. Highergov.com Reviews
The website states that “When third parties check your credit score, it can lower your credit score,” though some partners may use alternative providers that typically don’t affect your score.
What are the implications of late payments on loans found via AmericanUnsecured.com?
Late payments may result in additional fees and interest charges from the lender, and they could also lead to negative reports to the three major credit reporting bureaus, potentially lowering your credit score.
What happens if I don’t repay a loan found through AmericanUnsecured.com’s partners?
Non-payment can lead to additional fees, interest, and collection costs, severely lowering your credit score.
Lenders are required to follow fair collection practices as per federal and state laws.
Is a business plan required for small business loans found through AmericanUnsecured.com?
No, AmericanUnsecured.com states that their lending partners have loans that do not require a business plan or other “troublesome paperwork.” Blitzhandel24.pt Reviews
Does AmericanUnsecured.com guarantee loan approval?
No, AmericanUnsecured.com’s disclaimer states that “providing your information on this website does not guarantee an approval with said products or services.” Pre-qualified offers are also not binding.
Is AmericanUnsecured.com McAfee Secure certified?
Yes, the website displays a “McAfee Secure” certification, indicating that it adheres to certain security standards for online transactions and data protection.
How does AmericanUnsecured.com make money if it’s a “NO FEE service”?
AmericanUnsecured.com likely earns revenue through referral fees or commissions from the lending partners when they successfully connect a borrower who takes out a loan.
Where is AmericanUnsecured.com located?
The website lists its address as 2355 Centerville Rd. Box 14348, Tallahassee, FL 32317 USA.
Are there any alternatives to interest-based loans like those facilitated by AmericanUnsecured.com?
Yes, for those seeking to avoid interest Riba, alternatives include Qard Hasan benevolent loans, Islamic financial institutions offering Murabaha cost-plus sale, Ijarah leasing, Musharakah/Mudarabah profit-sharing partnerships, community support systems, and government aid. Gift42boutique.com Reviews
How can one minimize the impact of an existing interest-based loan?
If one has already taken an interest-based loan, minimizing its impact involves prioritizing early repayment to reduce accrued interest, seeking sincere repentance, avoiding future interest-based debt, and building financial stability through Halal means.
What are the potential financial risks of unsecured loans with high APRs?
Unsecured loans, especially those with high APRs, carry significant financial risks including the potential to fall into a cycle of debt, substantial interest payments over the loan term, and negative impacts on credit scores if payments are missed.
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