An unsecured loan, which is also called a personal loan, may be obtained without collateral or security. This is the best option for individuals who do not want to risk losing their home or other assets in the event of repayment arrears. Bad credit unsecured loans are those granted to people who have been declined finance repeatedly because of a bad credit score or poor payment history.
Unsecured loan lenders specialise in this type of borrowing. Potential borrowers will need to provide the lending institutions with some basic information before finance is granted. Specifically, when applying for unsecured loans with bad credit, borrowers will have to give details of their current address, whether they are a homeowner or tenant, employment status and bank account details.
Although interest rates may vary according to the amount being borrowed, bad credit loans have a comparatively higher rate than most types. The interest rates might also be influenced by the applicant’s credit score. This implies that the lower an individual’s rating, the higher the interest rates that will be charged on the amount borrowed. These factors are primarily related to the higher risks of non-payment on loans with bad credit.
Amounts borrowed can vary from £100 to £25,000. Likewise, the repayment period will also vary according to the amount borrowed and the level of monthly repayments that the individual can afford. Personal unsecured loans can have fixed monthly payments and a fixed interest rate which is applied throughout the repayment term. This type of agreement is advantageous to borrowers as it helps them to budget.
Bad credit loans in the UK may be obtained for various personal or business needs. For example, the money borrowed can be used to pay for a holiday, a new car, and home improvements or even towards the purchase of a new home. It may be also be used for debt consolidation, for business deals or for various other personal needs. Furthermore, it isn’t always necessary to specify what the amount is being used for.
In the event of the borrower failing to complete the repayments, the lending company can take the necessary action to ensure collection of the full amount borrowed including the interest incurred. Such action could entail making regular collection calls, obtaining the services of a third party collection agency or taking legal action for collection of the debt.
A bad credit score does not have to be a hindrance for any individual that has an urgent need for cash. A lending agency can help by searching for the best deals that will meet the individual’s current financial situation. Often, credit agencies have links to many financial providers, which enables them to find products with preferable rates and terms.
Obtaining this type of finance is a good initial step towards restoring financial stability. It should serve as a stepping stone by displaying a commitment to meeting regular monthly repayments on time. This in turn can improve an individual’s rating so that it will be easier to regain the confidence of institutions that may previously have declined finance.
Back on Track Loans specialises in lending to people with a bad credit score or payment history. Additionally, we have over lending options available, which enables us to find the ideal products for our customers.