Tag Archives: rates
Unsecured personal loans: A better alternative to credit cards
Plastic money is not only convenient to use but people also feel good when using it. The downside is that the credit card companies charge a very high interest rate in case of credit cards. If you want to enjoy the benefits of unsecured finance without having to pay high interest rates, you can look for some other better choices. Unsecured personal loans are one of them. Like credit cards, these loans also do not require any security and you are free to use the loan amount in any way you want. The biggest advantage is that the interest rate is quite lower when compared to credit cards. So, you may consider switching to unsecured personal loans to gain some advantage.
Unsecured personal loans are very much popular in the UK financial market. According to the results of a research carried out by a price comparison service site, many British women have become reliant on unsecured finance in order to fund their spending. The research reveals that women in Britain have unsecured loans amounting to a whopping twenty billion pounds, and this is apart from a further four and a half billion pounds outstanding on their overdraft facilities. It was observed that the British women use the major part of their unsecured funding for shopping, fashion and beauty.
Online lending has added another feather to the already competitive UK financial market. Now, people prefer taking out loans through online channels. They do not have time to personally meet various loan officers from different companies to get a loan. It is easier for them to apply with a reputed online broker, who can give them a number of options (loan plans) to choose from. There are many lenders who provide unsecured personal loans at competitive rates. So, if you have made up your mind you can contact them online and get some of the best loan deals available in the market.
Unsecured High Risk Loan
An unsecured high risk loan can be hard to find, and even harder to find is an affordable interest rate, but there are things you can do to better the situation.
When lenders look at applications they decide who to lend to based on how much of a risk they are taking with each applicant that they won’t be repaid. When you have a bad credit history the lender sees this as a pattern, and decides it is riskier to lend to you than other people. If they decide to still lend to you, they raise the interest rates according to how much of a risk they feel they are taking. To ensure approval of your application, and to get offered the best interest rates possible, you want to show the company reasons you are likely to make your payments on time.
Unsecured high risk loans are given largely based on your credit score. Your score is determined based on the information in your credit report. The first thing you can do to better your application is to fix anything you can on the report. If accounts you’ve already paid are still marked open or overdue call the company and keep talking to them until that is fixed. If you have high credit card balances paying these down will also help a lot.
Another thing you can do is offer some form of collateral and apply for a secured loan, instead. In this case if you fail to make payments the company will repossess the item you offered as collateral. This greatly lowers the risk the lender is taking, and you are rewarded with lower interest rates, and an easier time finding approval. Of course, this increases the risk you are taking as well.
Other than doing any of the things stated above, the best thing you can do for your unsecured high risk loan application is play up your strong points. Do you have a steady income? Have you been with your current employer for several years? Do you have a budget plan that shows your expenses, and how you’ll be able to easily afford your monthly payments? These are all things the lenders will be interested in, and will help you. Also, if your credit issues are all around one particular event, like medical bills, divorce, etc, then have a short one or two sentence explanation prepared to tell the lender. You do not want to dwell on this, but companies do want to hear how you came to be in that problem in the past, and why it won’t happen this time.
Once you get funding, remember to make your payments on time. This unsecured high risk loan may be your chance to build up a positive credit history so you’ll have an easier time in the future.