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Poor Credit Unsecured Loan: Loan
without any mortgage for people with poor credit .
You may have a poor credit record and so you may be
apprehensive that no lender will lend you. But to a
lender, your circumstances might not seem as bad as
you might think they are and you may have more choice
than you expect. A poor credit unsecured loan is of
such choices.
Almost twenty five percent of people in
UK have one or other type of below average credit history,
which effectively means that they have poor credit record,
which may have resulted due to various factors such
as late utility bill payments, defaults, arrears, CCJs,
bankruptcy etc. These people face problems satisfying
the credit score criteria used by loan providers.
If you have been refused a loan because of poor credit
history or before actual lending such loan providers
have told you that you have a poor credit score because
of defaults in payments of your previous loan or maybe
you have been listed in defaulters’ list because
of your consistent poor credit record, whatever your
credit status is, there are loan providers who willingly
offer loans to such borrowers and so it is strongly
recommended that you search and evaluate such lenders
and their quotes before you decide one way or the other.
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It
is also important to know that there are significant
difference in interest rates among such lenders and
so evaluation of such lenders become important before
selecting any one lender.
Poor credit unsecured loans
If you have poor credit score you have two options
to further borrow-First, Secured Loan and second, Unsecured
Loan. In case of unsecured loan, you are not required
to provide any personal property as security for the
loan, which we call collateral. In this case, offering
loan by lender is comparatively risky compared to a
secured loan. However, it does not mean, you can go
scot-free, without repaying the loan amount to the lender.
In case of non-payment of loan, if the lender initiates
any legal proceeding, courts have the power to attach
property of such borrowers to compensate lenders.
Poor Credit Unsecured Loan-Amount & Interest
Rate
You may feel that your credit status is too bad to
fetch a loan but a lender’s observation may be
different towards your credit status. For example, at
time lenders ignore minor credit problems in the past
if all other aspects of borrower’s application,
such as employment history, level of income, record
of timely payments etc are good.
However, in case of poor credit unsecured loan, lenders
loan remains at risk and this risk is substantiated
by the borrower’s poor credit record. To add further,
since the loan is unsecured, borrowers at time feel
that they can manage even without paying the loan amount.
So, overall there is increased risk for lenders. To
compensate against such increased risk, lender’s
charge a little higher rate of interest and varies from
borrower to borrower, depending upon their profile.
Similarly, the loan amount depends upon various factors
such as borrower’s income and employment record,
record of timely payment, recommendations, any other
going running at the time of application etc. However,
usually, in the poor credit unsecured loan, the loan
amount varies in between £250 - £25,000.
Poor Credit Unsecured Loan-Eligibility and
Purpose
There is no prescribed eligibility to avail a poor
credit unsecured loan. Unsecured loans are available
for people in full time employment, part time employment,
claiming disability living allowance, housewives, househusbands,
unemployed, retired, self employed and contract workers
- no matter what your circumstances, all unsecured loan
applications are considered on their own individual
merit. The borrower may be Tenants, Council Tenants,
Living With Parents, Homeowners etc...
Similarly, a poor credit unsecured loan is available
for any and every purpose, deemed fit by the borrower.
It may be used to purchase a new or used car, a dream
holiday, pay off all your existing debt or debts, home
improvements, to finance your dream wedding and more.
In principle decision are conveyed to borrowers within
24 hours of filling applications.
To conclude, a poor credit should not stop you from
borrowing further loan. There are lenders who offer
poor credit unsecured loan to borrower with poor credit.
In this category of loan, loan amount and interest rate
vary from borrower to borrower and depend on borrowers’
profile.
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