Loans for bad credit, such as unsecured bad credit loans, are specifically designed for people with a poor payment record or a history of defaults. Under normal circumstances people in these types of situations find it difficult to obtain finance from the mainstream lenders who see them as a high risk.
Where high street banks and other lending institutions may be unwilling to provide finance for people under such circumstances, there are providers that specialise in bad credit loans. If you have a poor credit rating, a loan adviser from a specialist company can help you to find financial products that will help you with your current predicament. These include bad credit unsecured loans which allow you to obtain finance without putting up any of your property as security.
You may have found yourself in your present situation for a number of reasons. Bankruptcy, County Court Judgments, missed payments, defaults and mortgage arrears are some of the reasons why an individual could lose his financial credibility. Unfortunately, records of these events are usually kept on your credit report which is referred to by mainstream lenders when reaching a lending decision.
Fortunately, specialist advisers can access loans for people in the above circumstances. You will not necessarily have to pay any additional fees on top of the interest in order to obtain these types of products. Your advisor can help you to find products that will benefit you such as bad credit loans with no fees. This will reduce the financial burden for you when making your application.
Because unsecured loans for bad credit do not require any form of collateral, interest rates for this type of borrowing are usually higher than for those referred to as ‘secured’. The term ‘secured’ means that in the event of default the lender will be able to claim the amount owed through any value in the property or goods that you have put up as security. The rate of interest will also vary according to the amount that you are borrowing.
The repayment period relating to the amount borrowed will vary and typical repayment terms can range from a year up to seven years in some cases. This will usually depend on the amount borrowed and how much you can afford to repay each month. If you take out a loan with a fixed rate of interest it can be advantageous because it enables you to budget for a set amount each month.
It is worth noting that if you do not meet the monthly repayments the lending company can take any necessary action to ensure the full settlement of the outstanding amount including any interest charges that may have accumulated because of missed payments. Although they won’t be able to seize your property if you didn’t give security, they can exercise other rights such as employing a collection agency or taking legal action. Therefore, if your circumstances change it is important to let the lender know before things reach this stage.
A bad rating can definitely pose a number of difficulties for an individual who is in dire need of cash. However, unsecured loans for bad credit offer the hope of financial assistance for people in these circumstances. Upon approval and once the cash is received, the borrower must commit to the terms of the financial agreement. By building up a good repayment record with this finance the borrower may find it easier to borrow in the future.
Back on Track Loans offers various types of finance for people with a poor credit history. We have strong links with reputable lenders and can therefore offer more than 250 lending options. This means that whatever your circumstances, we should be able to find a low cost product to suit you.