Poor Credit Unsecured Loan

If you have had trouble managing your finances in the past, your credit rating may well have suffered. If you are in need of a loan, you will find that your options are more limited due to this, and that the mainstream lenders may not be able to help. In this case, a specialist loan provider may offer you a poor credit unsecured loan. This is a financial product that incurs high interest rates, due to the fact that you are unable to secure the poor credit unsecured loan against your property. In addition to this, as your credit rating is poor, lenders do not have the guarantee of knowing that you will be able to pay back their money.

Your eligibility for a poor credit unsecured loan may not simply have come from the fact that you have missed payments or had county court judgments (CCJs) filed against you. Your credit rating is determined by how well you can pay back money that you have borrowed. If you have never been in debt, either with your bank, through credit cards or personal loans, loan providers cannot tell whether you pose a risk to them, and therefore your credit rating becomes worse. The alternative to a poor credit unsecured loan would be to secure your property against the loan, or another valuable asset, depending on the size of the amount you wish to borrow. However, you would need to carefully consider whether the risk that comes with putting your house up as security against a loan outweighs the financial inconvenience of a higher rate of interest on a poor credit unsecured loan. We would advise that you speak to a qualified advisor to talk through your options before proceeding.

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What is a Poor Credit Unsecured Loan?

• An unsecured loan is an amount of money that is borrowed effectively on trust, since the lender has nothing to reclaim if you are unable (or unwilling) to pay back the loan.  A poor credit unsecured loan means that the consumer has a bad credit history due to financial difficulties, missed payments or a lack of borrowing in the past, and this will add to the level of trust involved in the borrowing.
• The lender will usually require a relatively high rate of interest for paying back the loan, to counteract the fact the risk in lending to you. 
• Although you would be in no danger of losing your property if you become unable to pay back the loan, your credit rating would be more damaged if you should default on loan payments, which would make future borrowing extremely difficult.