Category: Unsecured Loans

Unsecured loans for bad credit are primarily designed to provide financial relief to individuals with a bad credit rating who may have been turned down by high street banks and other lending institutions. These sources of finance offer hope for people in this type of situation as funds may be granted without the borrower being subjected to a thorough credit check.

It is possible to obtain bad credit unsecured loans by fulfilling a few basic requirements in order to as certain that the borrower is eligible. The applicant must be at least 18 years of age and a resident of the United Kingdom. He should be in receipt of regular income and have a bank account with a direct deposit facility. The debtor’s proof of income assists lenders in determining how much will be loaned to the applicant.

Bad credit loans generally have higher interest rates than other standard financial products. This is due to the fact that there is a higher risk of non-payment on the part of the borrower. Another factor that exacerbates the element of risk is the fact that these types of credit are unsecured. This means that the lender does not have any form of security so he cannot automatically seize the borrower’s goods in the event of non-payment.Because of the risks the amounts lent are also lower than with secure finance. If you are considering bad credit loans as a solution to your financial needs, it is a good idea to take the above factors into account and assess what is available to you. As lending institutions are now conveniently accessible online, it makes it easier to find those that offer the best deals and the lowest Annual Percentage Rate. This enables you to compare quotes to find the best product to suit your circumstances.

In addition to this, you may find that some lending institutions will offer you bad credit loans with no fees. This will work further to your advantage as it means that you won’t have to pay any additional charges such as upfront fees, service charges and processing fees. So the only sums you will repay are the amount borrowed plus interest. Repayments for these types of products are usually made monthly for a period of up to seven years. The interest rate and the monthly payment can be fixed for the entire period until the whole amount borrowed is repaid in full. This makes it easier for you to budget as you know exactly how much you will need to set aside each month.

It is important to note that if you are unable to make the repayments on time then you should contact the lender to see if you can come to some arrangement. If you repeatedly fail to meet the payments the lender has the right to take action against you, which could involve a collection agency or legal enforcement. As this could cause further damage to your credit rating it is important to reach an agreement with your lender as early as possible.

Back on Track Loans specialises in finance which is specifically aimed at people with a poor credit history. We deal with many reputable lenders and offer more than 250 lending options including unsecured loans. This means that our friendly team can help you to find a low cost product to suit your circumstances.

Bad credit loans are a good option for people who may have difficulty obtaining finance because they have previously got into payment arrears, or had CCJs or defaults. There are a number of bad credit loans lenders that now offer this type of finance but you may be confused by the financial jargon that is used to describe borrowing that is specifically for this sector of the market.

Some of the terms that refer to borrowing aimed at this market sector are: bad credit loans with no credit check and bad credit loans with an instant decision. The former is a useful option as it means that people do not have to worry about getting turned down because of past financial difficulties. The latter also often implies that stringent checks are not likely to be carried out.

Another type of borrowing that you may see advertised is bad credit loans with no fees. With this type of finance the borrower will still have to pay interest on the amount borrowed. However, there will be no set up fees or additional charges levied such as administration fees. Therefore, these can often prove beneficial.

In describing the various types of products that are on offer, we will begin by looking at unsecured bad credit loans. If you do not wish to secure your property against the amount you have borrowed then unsecured loans for bad credit are a good choice. However, the interest charged on them tends to be higher than that charged on secured forms of borrowing.

Amongst the types of unsecured bad credit loans are those requiring a guarantor. In this instance the guarantor is usually a trusted family member or friend who guarantees to take over the repayments on your behalf if you fail to meet them. Guarantors are usually required for people who haven’t had a chance to build up a credit record, for example, parents often act as guarantor for their adult children.

Another type of unsecured finance is when the repayments are collected from the home. These are known as home collection loans. The amount granted is usually low (generally between £100 and £500). A representative from the lending company calls at the home on a regular basis to collect the repayments, which is normally around once a week or once a fortnight.There are also various types of secured finance available for people with a poor credit history. Borrowing can be secured against the home, car or other property. Additionally, payday loans rely on the borrower earning a regular income and the amount granted is paid back as soon as the borrower’s salary is paid into his account.

Even a visit to the pawnbrokers is a form of secured finance. The borrower takes his goods to the pawnbroker who lends him a sum of money based on the perceived value of the goods. The person then returns at some point in the future and pays back the sum of money with interest in return for his goods, which have acted as security against the sum of money that was borrowed.