Unsecured Loans – The Risks That You Should Know

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Posted on 29th October 2009 by Sandra Thompson in 1 |unsecured loans

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When in search of a loan, you may find that most lenders require good credit and collateral. If you have an imperfect credit and you don’t have a property to submit, does that mean you can never get the loan you need?



The good news is that there are lending companies that offer unsecured loans for people with bad credit. However, you need to be extra careful in choosing as there are some lenders who try to take advantage of their customers by imposing unfair terms and fees.

Can You Trust Online Lenders?

Many lending companies now offer online application. All you need to do is submit your application online and get a quick approval. But watch out against subprime lenders who charge hidden fees or extremely high rates on the loans they offer. If you will not spend time doing comparison, you may find yourself stuck with an expensive loan.

In addition, applying online poses another risk – Identity Theft. When requesting for free pricing quotations, see to it that you are not being required to provide your personal information such as your full name, address or Social Security Number. These details are not necessary to get an estimated pricing.

If you do decide to send your application through the internet, see to it that you are signing up with a legitimate lending company and that you are using a secured website. Remember that not all lenders online are legal. Some of them could actually be scammers disguising themselves as unsecured bad credit loan lenders.

Know Your Rights and Privileges

Just because you have a bad credit history or a low credit score does not mean you should settle with unfair terms. There are laws that protect the rights of all consumers, regardless of their credit standing. Although unsecured bad credit loans may come with higher rates than their secured counterparts, there are still limitations on imposing fees that lenders must follow.

Read and understand your loan contract. If there are terms that seem vague or unfamiliar to you, do not hesitate to ask for an explanation. Speak with the company’s representative. If you can personally visit the lending company’s office, it is advisable to do so. You can use the internet to compare different lending companies but once you narrowed down your choices, spend time in doing further research.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.


Tips on Applying for An Unsecured Tenant Loan

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Posted on 23rd October 2009 by Sandra Thompson in 1 |unsecured loans |unsecured tenants loans

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Unsecured loans are also called tenant loans because these are especially offered to non-homeowners. If you are renting a home, then obviously you cannot qualify for a secured loan. However, because of the risk unsecured loan lenders may be more rigorous in approving applications.



Below are tips on how you can increase your chances of getting approved for an unsecured or tenant loan:

Build up your credit rating. Have you checked your credit report? If not, order a copy of your report from the three credit bureaus (Equifax, Experian, TransUnion) to see if you can qualify for a tenant loan.

See to it that there are no false charges or incorrect details in your report which could pull down your score. If you discover any error, send a dispute letter immediately to the bureau that issued your report. Once the corrections have been made in your credit report, that’s the time you can submit your loan application.

If you have a low score, consider working on improving your score before applying for a tenant loan. Having good credit not only ensures the approval of your loan, it also gives you a stronger negotiating power when asking for a lower rate or a better deal.

Close out obsolete accounts. Do you have credit cards that you do not use anymore? If yes, consider closing out your idle accounts. Having too many credit card accounts in your name makes you a “risky borrower” in the eyes of lenders. Nevertheless, when closing an account, see to it that it’s not the one that makes up the oldest part of your credit history.

Do not submit many applications at once. Some people try their luck of getting approved for a loan by submitting applications to different lenders. However, each lender you submitted an application to will be inquiring on your report and they will also see inquiries from other lenders. Too many inquiries in your report sends out a negative impression as to why you need multiple loans or why you need to apply to different lenders.

Secure a stable employment. Do you have a stable job? Of course, lenders want to make sure that you will be able to keep up with your repayment not just for the first year but for throughout your loan’s term. If you’ve just got hired, you may want to wait until you get past the “probationary period” before applying for a loan.

Do not apply if your credit rating does not qualify. Getting your application declined will only hurt your credit score. Thus, before submitting application, check the credit qualification of the lender and see to it that you are eligible to apply.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2008.


Unsecured Loans for Your Short Term Business Financing Needs

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Posted on 19th October 2009 by Sandra Thompson in 1 |unsecured business loans |unsecured loans

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Do you need financing assistance for your small business? Are you hesitant to apply for a loan because you don’t have any collateral to submit? If yes, then why not consider acquiring an unsecured business loan? In this article, let’s discuss how unsecured loans can provide timely financial support and how you can enjoy lower rates despite the absence of collateral.



Unsecured Business Loans – Short Term Financing Without Collateral

Lenders who offer unsecured loans do not require collateral or any type of security from their clients. However, the amount you can borrow may be limited to a smaller range. Most unsecured lenders offer anywhere from $1,000 to $25,000, depending on the credit rating of the applicant.

Because of the absence of collateral, lenders may depend on your credit history when reviewing your loan application. An excellent credit rating shows your capability to handle credit and debt repayment well. Needless to say, a lender will be more confident to grant approval if the applicant can present an impressive credit standing. On the contrary, if your credit report shows a low score, a lender may become hesitant to extend a bigger loan, or any amount of loan for that matter.

While unsecured loans may not be sufficient to cover for very large expenses, these loans can actually be a business’s life saver. For example, if one of your machines broke and needs to be repaired or replaced right away, having quick access to cash makes a big difference.

The Key to a Successful Unsecured Loan Financing

Unsecured loans are known for their higher fees and interest rates. Understandably, the costs are much higher than loans that require collateral. However, it does not mean you should put up with lenders who charge excessively. By doing research, you should be able to eliminate wrong choices from your list.

What about the repayment terms? Typically, the repayment period for unsecured loans range from 6 months to a year, depending on the amount borrowed. It is best to choose a loan with a fixed rate of interest to make sure that you will be able to keep up with your repayments throughout your loan’s term.

Watch out for lenders who impose very unreasonable prepayment penalty. You will be charged with a prepayment penalty if you choose to complete your loan payments before your repayment term ends. Last but not least, create your repayment plan to make sure that you will not miss your due dates. Although no collateral is involved, your late penalty charges can soar if you fail to make your payments on time.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.


How to Avoid Hidden Costs on Unsecured Loans

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Posted on 13th October 2009 by Sandra Thompson in 1 |unsecured loans

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Finding an unsecured loan and getting approved for one may be easy. But before you go ahead and sign up that loan contract, see to it that you are not putting up for a lender that imposes unreasonable rates and terms.



Unsecured Loans – Why Be Concerned

Unsecured loans do not require collateral and although the rates may be slightly higher than secured loans, you should never settler with unfair lenders. Below are some tips on how to avoid hidden costs from unsecured loans:

Search for the right lender. Make sure that you are dealing with a legal and legitimate lending company. Check from the BBB (Better Business Bureau) if the company has issues or complaints from its past or present clients.

Understand the terms of your lender. When scouting for possible unsecured loan lenders, spend time doing more research. Call up the lending company or personally visit the office if you can. Ask questions and see to it that you’re getting clear, straight answers.

Review your documents and contract. If you are not familiar about unsecured loans, you can ask advice from an attorney or an accountant. You can also use the internet for studying the terminologies associated with unsecured loans.

Be cautious upon signing up the agreement. Once you signed up a document, you are bounded by the terms of the lender. Never sign up a contract if there are blank lines or empty spaces where details can be added after you signed it.

Watch out for low interest business loans. Watch out if the lender is offering an incredibly low rate, especially if it’s variable rate loan. Variable rates are subject to change at any time within your loan’s term. You may find yourself stuck with an expensive loan in the middle of your repayment period.

Watch out for unreasonable prepayment fees. You will be charged with a prepayment penalty fee if you wish to pay off your entire balance before the completion of your repayment period. However, some lenders may take advantage of the high monthly interest rate by charging excessive prepayment penalty to discourage you from advancing your payment.

Know your credit standing. You can enjoy better rates if you have a good to excellent credit. Despite not submitting collateral, your lender will be more confident to give you a low rate if your credit report shows that you are a responsible borrower.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.


Why Get an Unsecured Loan for Tenants

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Posted on 5th October 2009 by Sandra Thompson in 1 |unsecured loans |unsecured tenants loans

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If you’re a tenant who is in need of financial assistance, an unsecured loan is your option. These loans do not require any collateral to be submitted as security for your debts. Thus, even if you are not a homeowner, you can still get the financing assistance you need without any hassle. In fact, some homeowners still opt to get a non-secured loan so they won’t have to put their home property on the line.



Unsecured Loans – Loans for Everyone

Apart from tenants or non-homeowners, people with a history of bad credit can also benefit from this loan offer. Students who have yet to establish their personal credit history can obtain an unsecured loan as financing assistance for their studies. If you are self-employed, you can get approved for an unsecured loan by showing your lender a proof of a stable monthly income.

Some lenders who offer loans without collateral accept unemployed customers. In this case, the borrower must have an active savings account in his/her name in order to get approved. Despite not having a job, it is still possible for you to get financial help through an unsecured loan.

Minimizing the Risks Involved

Borrowers are advised to take their payment obligations seriously. Although no collateral is at risk, you can avoid the consequences of paying late penalty fees or increased interest rates by staying true to your schedule.

Understandably, if you have a bad credit history, you’re most likely to be offered higher rates. Find a lending company with the most reasonable offer for your situation. More importantly, do research about the lender’s background and reputation to avoid getting ripped off.

Yes, getting approved for an unsecured loan is not dependent on your credit status. However, it would be advantageous for you if you can show your lender an impressive credit history. If you have good credit history, you will be regarded as a reliable borrower and your lender would be more willing to give the best possible deal.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.


The Pros and Cons of Unsecured loans

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Posted on 1st October 2009 by Sandra Thompson in 1 |unsecured loans

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If you have a plan to get an unsecured loan, don’t forget to consider the pros and cons of your decision. True, this type of loan doesn’t involve any collateral but that doesn’t mean you should take your obligations lightly. Below are the pros and cons that can influence your decision:



The Advantages of Unsecured Loans

Easy Approval. Unsecured loans grant easy approvals for almost anyone. There are a variety of unsecured loans to match your needs- whether you’re a tenant, a student, unemployed, someone with bad credit or no credit history.

Quick Process. Application can quickly be sent online and you can expect to get a response within minutes or on the same you submitted. As soon as you’re approved, the money will be deposited in your bank account or you may choose to get it through wire money transfer.

Little Paperwork. Unlike secured loans where you need to submit collateral, there’s very little paperwork required with unsecured loans. Usually, all you need is proof of income such as a copy of your payslip or tax presentations and an active savings account.

Fixed-interest rate. An unsecured loan must have a fixed interest rate so that means you monthly instalment fees should not change from the start until the end of your repayment term.

The Disadvantages of Unsecured Loans

Higher interest rates. The absence of collateral makes it a riskier business for lender. To make up for the risk, lending companies charge higher interest rates on this type of loan. Nevertheless, if you have a very good credit history, you should be able to request your lender to lower your rates and fees.

Limited loan amounts. Loan amounts are limited to avoid the risk of delinquency. The limit may depend upon the lending company and the Lending Laws that govern your State.

Shorter repayment period. The repayment term varies from one lending company to another. However, unsecured loans tend to have much shorter repayment period.

Pre-payment penalties apply. A lender expects you to pay off your loan in monthly instalments according to the period agreed. However, if you choose to pay off your outstanding balance in an earlier time, you’ll be subjected to pay a pre-payment penalty. This is to make up for the loss of interest fees you’re supposed to pay your lender during the remaining time of your repayment period.

About the Author

Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.