Unsecured Loans – A Guide
Unfortunately, we can all find ourselves in a tricky financial situation from time-to-time. Perhaps your car has broken down and you need it fixed to get to the work, but you cannot afford the expensive repair bill! Maybe you have simply had trouble managing your finances, and things have gotten a bit out of hand.
No matter what has happened, it is important to recognise that you are not alone. This happens to most people at some stage in their life, and there is help available. Not everyone has friends or family they can turn to, nor do they want to discuss their financial matters with people they know. This is where an unsecured loan becomes an attractive credit choice.
We are a loan broker in the UK, introducing the most effective deal on unsecured loans. Our main objective is to help you in finding out the right unsecured personal loan to match your financial requirements.
What are Unsecured Personal Loans?
An unsecured loan is a fixed rate loan that is taken out for personal use, i.e. for home improvements, small value purchases, repair bills, building credit, cars, rental purposes, and holidays. There are some instances when an unsecured personal loan may be taken out for small business purchases. These loans are typically small in value, i.e. between £500 and £25,000, depending on your circumstances. Your eligibility for this type of loan is determined based on your credit rating, as no assets will secure the lending. Once the firm has assessed your credit rating, they will be able to give you a percentage APR based on this. This is ideal for people who do not have any assets to their name, such as a property.
Benefits of Unsecured Loans
There are many benefits associated with this type of loan, irrespective of whether you are interested in unsecured business loans or personal loans. This includes:
- Quick completion – While the company you make an application to cannot promise to send the money to your bank within 'x' hours of receiving your application, unsecured loans are generally much quicker than other types of loans, especially secured loans. This is because you are borrowing a lower amount, and less is taken into consideration. There is not as much paperwork required either. This is why you will hear cases of money being received on the same day as the application being approved.
- Your home is not at risk – You may be a homeowner, but do you really want to put your property at risk? Many people prefer unsecured loans because this is a solution that is not going to directly pose a risk to their assets.
- They are available to both homeowners and tenants – One of the biggest advantages associated with unsecured loans is the fact that they are available to anyone. As you do not need to put up any collateral, you will find that you are much more likely to be eligible for this type of loan.
- Flexibility – As there are many companies offering unsecured loans, you benefit from a degree of flexibility. The firm you deal with may be willing to offer you a repayment schedule that is tailored for your situation, i.e. making bi-weekly payments instead of weekly payments.
Bank or Alternative Lender?
There are many reasons to consider an unsecured personal loan. However, when it comes to choosing unsecured personal loans in the UK, what is better-a bank or an alternative lender? Most people find that the later is the only option. Banks are notoriously difficult to strike a deal within the moderate amount; they only want to take on minimal risk. Moreover, their loans tend to be designed for those seeking a bigger amount for a longer period.
Are you the Right Candidate for an Unsecured Loan?
Not everyone is suitable for an unsecured personal loan. Primarily, you will need to have a good credit rating. To secure a loan, you need to show that you are not a risk to the creditor, and so it helps if they can see that you have made credit repayments on time in the past. This does not mean that unsecured loans for bad credit are not available; credit report will be assessed, and a decision will be taken on an individual basis.There are other factors that will improve your chances of being accepted for this type of loan, which includes whether you have a good relationship with the bank if you have job security, and how long you have lived at your current address. In regards to the later, your credit score will be boosted if you have lived at the same address for a long time. Moreover, those with a secure job are viewed as less of a risk, as they have a continual income that will cover the repayments.
Important Points to Keep in Mind
As you can see, the benefits of taking out an unsecured loan when you find yourself in financial difficulty are extensive. Nevertheless, you need to be responsible. If your circumstances have changed and you cannot make the repayments, please get in touch with Loan Broker straight away so we can see if there is any way we can resolve the situation, i.e. by altering your repayment schedule. Although stringent checks are conducted to ensure that you can afford to make the repayments, you have a responsibility to only borrow what you can afford to repay.
Get in Touch Today
If you are interested in an unsecured loan, please do not hesitate to get in touch with Loan Broker. We are happy to answer any queries you may have. We understand that most people do not have time when they need to borrow money, which is why we act with urgency while dealing with all applications. At Loan Broker, we will assess the details you have provided, and determine whether you can afford to make the repayment. If you can, we will agree on an amount to be borrowed and a loan repayment schedule. We are here to help you, so please make sure you get in touch with us if you have any difficulties along the way.