Debt Management Solution For Someone With Very Bad Credit

As you are reading this, bear in mind that the remainder of it has valuable info about blacklisted unsecured loans and relevant to first loans, homeside or international loans for you to read.

An unsecured loan means exactly what it says, a loan 'not secured' on your property, that you can spend as you want. People tend to use them to buy a new car, the holiday of a lifetime, home improvements, or possibly to settle spiralling credit card debts at one time, thus allowing you to stretch the installments over a longer term with a smaller interest rate.

With an unsecured loan, how much can I borrow?
You can generally get an unsecured loan for up to £15,000 (if you have a good credit history) but some unsecured loan companies can grant you as high as £25,000 unsecured (if you have an EXCELLENT credit rating). Nonetheless, keep in mind that you should be able to afford the loan repayments. With unsecured loans, you can often be approved in principle over the phone.

What are the min/max repayment periods for an unsecured loan?
This partly is up to the unsecured loan company. Some unsecured lenders can give an unsecured loan for as little as 1 year, however, a 5 to 7 year term is more likely. The maximum unsecured loan length is generally 7 years but some unsecured loan companies will loan over 10 years. Unsecured loans make most sense for those who want to pay back the money borrowed over a few years. If you only want the money for a short period, for example, 6 months, purchasing with a credit card may be cheaper.

How does the unsecured interest rate work?
Unsecured loan interest rates are usually fixed for the duration of the unsecured loan contract, which means you know specifically how much you have to pay back monthly. The drawback is that you could pay more than others who get a similar unsecured loan in six months' time - then again, you might pay less! Either way, you will not have to be anxious about unsecured loan repayments increasing. Many unsecured lenders will request that you arrange a direct debit for the loan instalments. Normally, the loan interest rate is lower if you borrow a bigger unsecured loan amount. With unsecured loans, the crucial point to note is the Annual Percentage Rate (APR). It's also crucial to be aware of the amount the unsecured loan will cost you in total.

Will I have to pass a credit check?
Yes, unsecured loan companies need to make sure that you represent a 'good risk' and therefore don't carry a history of poor credit and unpaid debts. To do this, the unsecured loan company will check your credit file from a credit reference agency - Experian, CallCredit plc or Equifax. A bad credit past won't necessarily hinder you from obtaining a personal unsecured loan, nonetheless, you will probably get an offer with an increased rate of interest. You may find it more difficult to obtain an unsecured loan if you are a sole trader or if your employment status is temporary.

What is an unsecured loan protection insurance?
This is an insurance cover you can take out to pay for (under certain conditions) the monthly loan repayments in the situation where you cannot - for example, when you have lost your job. Think carefully if this is actually necessary. Unsecured loan payment protection insurance (a bundle with the loan) is frequently expensive and if your financial position is unsteady, is it wise to be borrowing more money anyway? If you would rather have a loan payment protection plan, enquire about exclusions and small print which could make it hard for you to benefit from the insurance.

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