The best unsecured loans provide an affordable way to borrow money for those who don’t wish or who are unable to provide collateral. Collateral is often necessary in order to benefit from low interest rate loans, especially if the applicant has an adverse credit history. Should missed and late payments be a problem, a bad credit history loan may still be possible. It is important to note that the terms won’t be as competitive.
Best Unsecured Loans
The most competitive rates will only be available to individuals with an excellent credit score rating. An improved FICO credit score is fundamental to receiving approval because the score is indicative of the risk of default posed to the lender. Bad credit will normally show on a credit report for seven years, although this can be as high as 10 years for chapter 7 bankruptcy.
Prosper is a peer-to-peer lender offering low interest rate loans to private individuals. This means that people lend to people in an open marketplace. The best unsecured loans will be offered to borrowers who fall into the A* and A classification. However, there are still bad credit history loans available on market leading terms. The borrower will be given an opportunity to explain their personal circumstances.
Loan From a Credit Union
Individuals who are finding it difficult to get approval for credit may be able to get approval from a Credit union. This is because they operate for the benefit of their members and not profit. A careful assessment is made of personal circumstances and the individual’s ability to keep-up with repayments. The borrower will also be offered non profit credit counseling in the event of financial difficulties.
Private Bank Loans
Whilst many consumers sign-up to the first loan they find, this is not a prudent strategy. Using a website such as Moneysupermarket.com allows the individual to trawl the market for the best unsecured loans based upon their credit history. A list of low interest rate loans will be provided based upon affordability. It is important to scrutinise the T&C’s of each loan prior to making a credit application.
It is important to be realistic when applying for credit as each search will show on a personal credit report for a 12 month period. Don’t apply for loans that are unlikely to receive approval as the best unsecured loans will only be available to those with good credit. However, bad credit history loans are still available on competitive terms from Prosper loans or a Credit Union.