An unsecured loan is also known as a personal loan and this type of borrowing is not secured against your property. This means that unsecured loan lenders cannot seize your home if you default on the repayments. It also means that these types of financial products are available to a broader range of people even if they aren’t home owners. You can obtain bad credit unsecured loans through companies that specialize in this type of lending.
Unsecured loans can be used for any purpose. They vary considerably in terms of the amount borrowed, the repayment period and the monthly repayments. That’s why it’s important to have an idea of how much you need to borrow, what you need the money for and how much you can afford to pay back each month as this will enable your unsecured loan company to get the best deal to suit your circumstances.
Loans with Bad Credit
These are available specifically for people with a poor credit record. This type of finance can be difficult to obtain but there are companies that can help. If your application is successfully accepted then not only will this enable you to afford life’s luxuries but, because you have been accepted, it could also help your credit record in the future. It is important to bear in mind though that each time you apply for finance it will show up as a search on your credit report.
Advantages and Disadvantages of Unsecured Loans
The fact that you don’t risk losing your home is an obvious advantage. However, this type of finance can be more difficult to obtain than secured finance especially if you have a poor credit history. You must also bear in mind that interest rates are often higher for unsecured borrowing. Again your credit history can affect the amount of charges that you will have to pay and interest rates can be even higher in this scenario.
Another advantage with this type of borrowing is that the rate of interest is fixed throughout the repayment term. This enables you to budget as you know exactly how much you have to pay back each month. On the other hand, with secured credit such as mortgages, the interest rate can be variable, which means that it will change in line with the base lending rate that is set by the Bank of England.
It is easy to apply online for unsecured credit through a credit broker, and the application process often takes only a few minutes. Once you have filled in the application the broker will assess your needs to determine what type of product will be the best for you. He will then contact providers on your behalf in order to find competitively priced financial products. You can often have the money paid into your bank account within a couple of days.
Back on Track Loans offers a wide range of unsecured loan products at competitive rates of interest. Because they have more than 250 lending options available they can find low cost products even for customers with a poor credit history.