 Unsecured Loans For People With Very Poor Credit
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A personal unsecured loan means exactly what it says, a loan 'not secured' on your home, for you to spend as you would like. People tend to use them to pay for a car, a dream holiday, home improvements, or even to clear costly credit card debts at one time, so allowing you to stretch the payments over a longer period with a lower interest charge.
With an unsecured loan, how much is it possible to borrow?
You can usually take out an unsecured personal loan for up to £15,000 (if you have a good credit history) but some unsecured lenders can grant you as much as £25,000 unsecured (if you have an EXCELLENT credit rating). However, don't forget that you are required to have the income to meet the loan repayments. With unsecured lenders, you can often be approved in principle over the phone.
What are the min/max repayment periods for an unsecured loan?
In part this is determined by the unsecured loan provider. Some unsecured lenders will offer an unsecured loan for as little as one year, although a 5 to 7 year term is more common. The maximum unsecured loan length is generally seven years but some unsecured loan companies will loan over 10 years. Unsecured loans make most sense for those who want to repay a purchase within a few years. For people who only need the money for a period of, say, six months, purchasing with your credit card may make more sense. It might interest you to know, as you go through this useful article, that plenty of people make the mistake of typing 'immediate loan unsecure', 'compare unsecure loans' or 'ccj insecured loan' while trying to obtain online content about to this topic.
How does an unsecured loan interest rate operate?
Unsecured loan rates are generally fixed for the whole term of the unsecured loan agreement, which means you know specifically the amount you will pay back each month. The drawback is that you might pay more than borrowers who borrow a similar unsecured loan amount in 6 months' time - then again, you could pay less! Either way, you have no need to be concerned about your unsecured loan payments rising uncontrollably. A lot of unsecured loan providers will require that you take out a direct debit for the loan repayments. Generally, the loan interest rate is lower if you borrow a larger unsecured loan amount. With unsecured loans, the critical factor to look for is the Annual Percentage Rate (APR). It's also essential to find out how much the unsecured loan will cost you in total.
Will I have to pass a credit check?
Yes, unsecured loan companies need to make sure that borrowers represent an 'acceptable risk' and therefore don't carry a history of bad credit and neglected debts. To accomplish this, the unsecured lender will obtain your credit history from a credit reference agency - CallCredit plc, Equifax or Experian. An impaired credit history won't inevitably preclude you from getting an unsecured loan, however, you will probably be charged a higher level of loan interest rate. You might find it harder to get an unsecured loan if you are self-employed or if you have a short term employment contract.
What is an unsecured loan insurance ?
This is an insurance you can buy to pay (under certain conditions) the monthly loan repayments in the event you cannot - for instance, when you have lost your job. Consider with care whether you really need this or not. Unsecured loan payment protection insurance (a bundle with the loan) is frequently expensive and if your financial circumstances are shaky, is it the best move for you to be borrowing more money on top of it all? Should you decide you do need a payment protection insurance, enquire about exclusions and small print which might make it impossible for you to benefit from the cover.
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