Category Archives: Loan Tips

Take A Short Break With An Unsecured Loan

If you’ve been postponing that trip for some time now and you just don’t want to delay it any longer; if you need a short break from your daily obligations, it is probably time that you take the vacations that you’ve longed for. However, do you have the funds needed to do so? If you need financing, then you can count on an unsecured loan to finance your short break.

Unsecured financing can provide you with all the money you need to finance your vacations but you need to make sure that you can get approved for an unsecured loan. Knowing in advance what requirements you’ll need to meet can aid you not only in getting approved for the loan but also to get more advantageous terms on your loan.

Unsecured Loans And Credit Requirements

Unsecured loans have credit requirements just like almost any other type of loan. However, there are some unsecured loans that don’t require credit checks. These loans are pay day loans and they provide a small amount of money, charge a very high interest rate and have very short repayment programs. They are meant for emergencies and that’s what they should be used for.

Other unsecured loans do have credit verifications and credit requirements. In order to get approved for an unsecured loan you need to have a good credit score since there is no collateral guaranteeing repayment in case you default on your loan. However, there are ways around if you don’t have a good credit score and you still need unsecured financing.

Co-signing An Unsecured Loan

Co-signing provides the lender with an additional guarantee of repayment. The co-signer agrees to be obliged by the loan contract’s terms just like the main borrower. And thus, in the event that the main borrower cannot meet the monthly payments, the co-signer will be forced to repay the loan himself until the main borrower can resume the repayment process.

This implies that the co-signer must have a good credit score and history or at least a better one that the main borrower so as to represent, in the eyes of the lender, an assurance of repayment and a security for his investment. You need to keep that in mind when asking relatives and friends to act as a co-signer. Also bear in mind that the co-signer is risking his assets even if no collateral is offered as the lender can still take legal action to recover his money and the co-signer is obliged just like the main borrower.

Bad Credit Unsecured Loans

Another option to increase your chances of getting approved is to apply for bad credit unsecured loans. These loans are specially tailored for those who have less than perfect credit. The loan terms on these loans are less advantageous than regular unsecured loans and thus, you should be extra careful when analyzing your ability to repay the loan. You also need to remember that vacations, though necessary, are ultimately an indulgence and not an essential expense. Thus overpaying for finance won’t do any good to your financial health.