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Unsecured personal loans bad credit advice

by Jim ONeil on October 26, 2010

in unsecured loans

Unsecured Personal Loans:  Available To Assist You In All Of Your Financial Needs

In today’s economic climate there is a strong need for unsecured personal loans in the United Kingdom.

Although these loans are not inexpensive, they are fast and convenient which is one of the main reasons many people rely on them.

An unsecured personal loan is a personal loan where the borrower does not have to provide an asset as security to the loan company. With these personal loans, the risk associated with the loan is lower for the borrower since the lender would not have a direct charge on their car or their home. Also, these loans are for smaller amounts so the borrower would only be able to apply for a loan of between GBP 1000 to 25,000.

These loans are available for many different purposes and offer varying loan amounts and time-frames for repayment. The amounts can range from £500 all the way up to £50000, with a period of up to several years to repay the loan. The interest rates will vary based on the loan purpose, credit history and your employment record. What makes these loans attractive is that they are unsecured, meaning you do not have to guarantee the loan with any personal assets, like your vehicle or home.

There are, as mentioned, several different types of unsecured personal loans. One of those is the payday loan. These are loans that offer fast approvals when you are in need of assistance immediately. They often require repayment on your next payday and unfortunately, in some cases, the next day.

What About Payday Loans?

Payday loans are not for everyone as they carry an extremely high interest rate. Unsecured personal loans of this nature should be considered a last resort for those that need emergency funding. Before considering a loan of this type you should make yourself fully aware of the terms and details in the agreement.

These personal loans are sources of funds for tenants and all types of non-homeowners.

One of the most popular unsecured personal loans is the tenant loan. These loans can be used to purchase a car, pay for medical attention, make improvements to a residence and can be used for holidays. They are also available for other purposes such as debt consolidation. The typical loan amounts are between £1000 and £25000 with repayment schedules up to 25 years depending on the amount borrowed.

Unsecured debt consolidation loans are a blessing for those in the U.K. that wish to lower their payments by rolling all of their debt into one monthly loan. This is extremely helpful to those carrying large debt scattered among several loans. You can often find specialists in this form of loan that offer exceptional rates without using collateral to secure the loan.

Holiday loans can be found that do not require a security deposit if you take the time to research lenders. Unsecured holiday loans will often carry with them a higher interest rate, however they are available for those that simply wish to take a holiday and approvals are often extremely fast.

Even homeowners tend to apply for these loans when they require only a smaller loan.

For the homeowner in the United Kingdom, home improvement loans are available as unsecured personal loans. Due to the amounts required, most lenders will only approve these when the borrower has a good credit rating assuring the lender of the borrower’s credit worthiness.

Another popular unsecured loan is the wedding loan. With the costs of weddings at an all time high, these loans are perfect for those with minimal income that simply cannot afford the wedding that brides often dream of. Based on personal income, a wedding loan can be applied for and approved in an amount up to £50000.

Car loans made in the United Kingdom are often unsecured personal loans. They may carry higher interest rates and your credit history could limit the amount you can borrow. Another option is using a tenant loan to purchase a vehicle as it may carry lower rates. In either scenario you can purchase an automobile without securing it with collateral.

For those with bad credit, there are unsecured personal loans available to you in the U.K. They are often approved in the £10000 range, carry a high interest rate yet have a repayment term of up to 10 years. This is an attractive option for those wishing to re-establish and rebuilt their credit worthiness without using their personal assets for security.

Most banks and lenders offer online applications and approvals making the loan process very easy and hassle free. There are also some lenders that approve personal loans online that are similar to payday loans, with the only verification being your employment.

In many cases these loans will carry a burdensome interest rate. They payments are made on your pay date continually until the loan is repaid at the end of the term. As with payday loans, you want to pay close attention to the details of the agreement before accepting a loan of this nature.

The funds would be transferred to the bank account upon approval and the borrower would be responsible for paying the monthly payments in order to repay the loans. These loans can be taken by tenants, students, or anyone else who doesn’t have an asset to offer or doesn’t wish to offer collateral.

If you are in need of funding fast, there is certainly a loan tailored to fit your needs without personal risk outside of paying on-time. All an applicant needs to do is compare the rates and accept the loan that best fits your financial situation. Remember that unsecured personal loans are there to help you and assist you in reaching your goals, not to create a financial burden in your life.

Benefits of unsecured personal loans

There are several reasons why unsecured personal loans are so popular with borrowers today. These loans offer plenty of great benefits to the borrowers. The biggest benefit of unsecured loans is that the borrower would not be risking repossession of the property since no collateral is provided for securing the funds.

Also, unsecured loans are processed very fast. If you have an emergency need for funds and require the loan on an immediate basis, then there are quite a lot of great loan companies like Wentworth, Barclays, Santander etc that offer instant decisions.

There is minimum paperwork with these loans and no hassles at all. Almost all lenders today offer the facility of online loan application process which would allow the borrower to apply for the loan right from the comfort of home.

These were some of the main benefits of unsecured personal loans.

Drawbacks of unsecured personal loans

•  Many things that can be beneficial also have drawbacks and this is the case with unsecured personal loans. One major drawback occurs when the borrower fails to make loan payments. The loan will subsequently default and the lender can garnish wages to collect the payments owed. Even if the borrower changes jobs or moves, the lender will find him or her and make every attempt to recoup its money.

•  As was mentioned regarding payday loans, unsecured personal loans APR are usually higher than any loan offered by a bank. The majority of people apply for this type of financing have poor credit. Some are willing to accept whatever interest rate they are offered in order to get money quickly. This can result in some very expensive borrowing. By doing some comparison-shopping, borrowers may be able to lower their interest rate.

•  Repayment period is usually much shorter than for a bank loan, secured personal loan, or even credit card. Since they must repay the loan within a shorter time, the minimum monthly payment is much higher than it would be with these other types of borrowing. Some borrowers struggle to make these expensive payments, eventually ending up in more debt because they cannot pay their other bills

•  It is often too easy to get this type of loan, leading some people to use the funding as a crutch. No one should apply for this financing unless the money will be used for something necessary. Funds should not be used for a vacation or shopping spree because this can lead to a life of indebtedness.

How to apply for an unsecured personal loan

1. Determine the amount of cash you need. Remember, the money should only be used to cover a necessary expense, not a luxury or unnecessary item. There is a difference between something you want very badly and something you actually need. The loan amount should reflect only costs of needed items.

2. The easiest way to search for this type of loan is to look online, so conduct a search engine query for “unsecured personal loan.” If your credit score is low, you may want to add the words “bad credit” to the search terms. Visit Web pages for the first five to seven lenders on the search list or look for a loan comparison site that compares offers from multiple lenders on one page. Review the general loan terms offered by each lender and select three lenders that look most appealing, ranking them in order of preference.

3. Request a loan quote from the first lender. If you are rejected, order a free copy of your credit report and review it. The report may contain negative information that is preventing you from being accepted for a loan. If the report contains errors, have them corrected. If not, look for bad credit loans instead.

4. If approved by the first lender, request quotes from the other two lenders. Compare the interest rates, monthly payments, and loan terms to find the best deal. Apply for this loan and repay it by making at least the minimum payment each month, always paying on time.

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Hi there! i am an international student, and i will start university in London in September 2012, and I would like to know how I can apply for an unsecured loan for the amount of £10,000.00
let me know please!thank you very much!

alex wibisono

i live in indonesia. i plan to start up project with very good business opportunities. no competitor yet (in my country). i need unsecured loans to realize it. can you help me?

thank you


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