#unsecured bad credit loans
Unsecured Loans and Bad Credit Loans: Part I
Whether you are a renter who does not have a home to put up for collateral or a homeowner who does not wish to secure a loan against your property, you can find an unsecured loan that can work for you. Even if you have poor credit, it is possible to attain a loan that does not require property secured against it.
An unsecured loan, sometimes also called a signature loan, is one that presents a significant risk to the lender. Should you fail to meet your repayment obligations, then the lender would have to take legal action against you in order to confiscate your property, or to otherwise obtain payment from you.
A secured loan, on the other hand, presents less of a risk to the lender because it is secured against a piece of valuable property generally a house that can be seized should a borrower fail to pay. Consequently then, secured loans usually are easier to obtain at decent interest rates than are unsecured loans. Nowadays, however, there certainly are options for individuals who cannot, or do not want to, put property up as collateral.
Unsecured Personal Loans
Unsecured loans for non-specific purposes generally are referred to as personal loans. Such loans can be obtained from a variety of lenders including banks, credit unions, and even online. In today s market, online lending is growing rapidly and tends to be quick and convenient.
The money borrowed through an unsecured loan may be used for any purpose whatsoever for home repairs, for a family vacation, to pay off other debt, etc.
Personal loans usually are small, short-term loans. They are designed to provide immediate funds for relatively minor expenses. Because of the short repayment period (usually a few months to a year) and the small amount of money borrowed, personal loans are excellent choices for individuals trying to build their credit as well.
Because unsecured loans present a substantial risk to the lender, the interest rates attached will be higher than you would find with secured loans. Your specific rate will be calculated based on the amount of the loan, your income, your credit score, and your overall financial situation. Because it is so highly specified, you most likely will end up with a rate that is different from most other people.
If you need to borrow more money than is offered to you through a personal loan, and/or if you need a longer repayment term, then you may have to consider going for a secured loan instead.
If you have an excellent credit score, you still might be able to find a sufficient unsecured loan, but otherwise speak with a professional about your other options. Perhaps a home equity loan or home equity line of credit could be a better option for you.
Bad Credit Unsecured Loans
Unsecured loans have higher interest rates than secured loans because of the lender s incurred risk, so unsecured loans for people with bad credit necessarily have even higher rates. Still, it is entirely possible to find a legitimate unsecured loan even if you have poor credit.
In today s financial environment, lenders understand how easy it can be for consumers to develop bad credit. It truly can happen to anyone and does not necessarily indicate an untrustworthy or irresponsible individual. There are many reputable sources that will provide you with a small unsecured loan despite your credit. Nonetheless, you almost certainly will need to get a cosigner in these cases.
If you need only a small loan and would have to incur a very high interest rate on a traditional unsecured loan, then you may want to look for another option for your financial need. For example, you might ask a friend or family member to loan you a bit of money. One would hope that the interest rate would be much lower from such a lender!
Whatever option you choose, you should familiarize yourself with your credit situation so that you will be able to improve your credit in the future. Know your credit scores so that you may use them for bargaining purposes, and so that you can recognize when your credit changes. Better credit almost always spells better interest rates, so take actions to repair your credit as soon as possible.