Anyone interested in an unsecured loan is no doubt interested in low cost unsecured loans. With the economic climate becoming gloomier by the day due to the general slowdown and rising food and fuel prices, low cost unsecured loans are in high demand. But, what exactly is a low cost unsecured loan?
The ?low cost? refers to the low interest charged on and over the life of the loan. Often, lower borrowed amounts and higher credit scores equal low cost unsecured loans. The riskier the deal for the lending institution, the more expensive the loan will be to you in the long run. Before borrowing the money, survey the lending options, asking them what their opinion of a good credit score is. Then, use one of the reputable credit scoring agencies to find out your score. You can get a free trial subscription to your credit report with Experian by clicking here.
If it is less than ideal, then you may have to borrow from a lender that deals specifically with high-risk borrowers to even be considered. If you have a less than desirable credit history, you'll often have a very costly loan, even with a specialised bad credit lender. Or, you may have to take some time to work on your credit score in order to be more eligible for low cost unsecured loans. If your score is good, you will want to research present good deals in low cost unsecured loans in order to bargain a bit with your lender.
And unsecured loan means that you put up no collateral against the loan. An opposite example may clear up this definition: An example of a secured loan is a mortgage. Your house is the collateral used on the loan. If you cannot or do not make your repayments, the lender can repossess your home, as is clearly stated on every mortgage lending website.
This is not the case with unsecured loans. If you are late on your repayment of unsecured loans, the lender has the right to pursue you for the outstanding balance, to the point of filing a county court claim against you. If you are found to be guilty of missed payments, a county court judgement (CCJ) will be filed against you and this will show up on your credit report for six years. In addition, if you declare bankruptcy, only your unsecured loans can be claimed.