Getting approved for a loan with a bad credit history may be an impossible feat to accomplish. More so if you do not have any kind of property to your name that you could use as a collateral. This would mean that the financial institution you are applying a loan from would not feel secured of giving you money if it would seem that you are not in a financial position to be capable of paying off a loan in the years to come. But what if the money that you are trying to get through the loan would help you have a better life? What if you would need it to pay off hospital bills because of an unexpected emergency? What if it could help you boost your own business so that you could already get out of debt and start earning money? Wouldn’t it be nice to actually get approved for a loan that could help you get out of a tight spot? It may be a hard feat to accomplish, but it is not actually beyond reach. Applying for a unsecured bad credit loan would give you a better opportunity to get you the money that you need to get you out of the financial drought that you most likely may be in right now.
When you do not own a property under your name, you could not really get loans amounting to larger sums of money. With most loans amounting to more than £10,000, you would most likely have to show a proof of home ownership. For larger amounts, it would already be considered as a secured loan because the loan that you are trying to get will be secured against a property that you supposedly own. For unsecured loans, you could already loan as little as £1,000 and as much as £10,000 without having to show the financial institution a proof of home or property ownership. You do not need to secure any sort of an asset under your name against your loan. What unsecured loans mostly rely on for the approval or decline of application is a person’s credit rating history. People who have a bad credit rating history would most likely be declined a loan or worse, be approved for a loan but with a crazy high interest rate to pay off.
Bad Credit Loan
People get bad credit ratings because of unpaid debts they have, or simply because they are self-employed and do not have a stable proof of financial capacity. Most self-employed people are automatically seen as with bad credit because they do not have a consistent amount of income each month, unlike employed people with a specific salary they get each month. But even though you still have debts in your name, or maybe no credit rating to begin with, you could still actually apply for a bad credit loan. The only downside to this is that most of these institutions would take advantage of your situation and give you high interest rates which you would have no choice but to actually take. These types of loans with high interest rates are also probably the reason why you are in debt in the first place, so if you could avoid it, why shouldn’t you, right?
Unsecured Bad Credit Loan
Financial institutions such as TFS Loans would still be able to grant you loans with a representative APR ranging from only 39.9% up to as high as 69.9%. This is highly dependent on how much money you are trying to get, and how long you are willing and able to pay off your loan. These rates are highly achievable by TFS because they work through guarantor loans. What happens when you apply for an unsecured bad credit loan is that you would be applying with a guarantor that you truly trust and who has a good credit rating. Your guarantor’s credit rating would be the basis of the approval or the denial of your loan application. When your loan gets approved, it would still be your responsibility to make your monthly loan repayments, on time and in full. Should there be instances wherein you would not be able to fulfill to pay off your loan repayment for the month, it would be your guarantor’s responsibility to pay it off for that given time period. It would then be an agreement between you and your guarantor on the how and when you would have to pay him back. The beauty in this set-up is that you would be able to be recognised as a person who pays off his or her loan on time and in full each month. This would give you the opportunity to actually raise your credit rating so that next time that you apply for a loan, you would not need to get a guarantor anymore.