Unsecured Loans for People with Bad Credit: Good or Bad

One of my friends, Allie Laura lost her job all of sudden because of the unexpected shutdown at the factory where she worked. Even after 3 months of losing her job, she could not find the suitable job. Because of being unemployed for over 3 months, she landed in financial crisis because all the expenses were same as those were the months before. So, the biggest issue for her was to deal with the current financial crisis. What were the options? She had heard about ‘unsecured loans for people with bad credit’ but she was not sure - whether taking the unsecured loan will be a good decision or bad.  This post is intended to guide the people like Allie Laura to help them decide right before it is too late.

Types of Unsecured Loans:

Unsecured loan for the people with bad credit history is one among the few options to meet out the emergency financial needs. There are different types of unsecured loans; so, before applying you must compare all the options:

Credit Cards loan is the borrowed money that you get from a credit card company to make purchases and to pay later. Payday loan is a popular unsecured loan option that allows you borrow the required money amount to be paid through next paycheck. Signature loan is sanctioned just on the basis of your signature taking your signature as the commitment to repay borrowed money in installments as agreed; these are available at credit unions and regular financial institutions. Almost all the banks in the UK offer unsecured term loans with a cap over the amount; these loans at floating interest rate are sanctioned with specific repayment schedule.

Unsecured Bad Credit Loans- Good or Bad:

The unsecured bad credit loans are good because you do not to worry for losing your pledged asset or relationship with the guarantor in case you fail to repay back the amount on the time. It is certainly a good option if you are uncertain about arranging the required money to repay the due loan amount; for example, Allie Laura is trying to get the job but she is not sure when she will get it to ease down her financial liabilities.

The unsecured loans for the people with poor credit history are made available by the private direct lenders at comparatively higher interest rate. The direct lenders analyze your repaying capability; so, you cannot take it granted that you will get the exact amount as you need. You pay little extra at the front of interest rate but you should accept it as the cost of meeting out emergency financial needs when you have no other option. Therefore, getting unsecured loan is a viable option for the people like Allie Laura who are jobless with poor credit score and have nothing to pledge but expect to have regular earning soon.

   

Takeaway: Judging ‘unsecured loans for people with bad credit’ as good or bad depends upon the nature of urgency for cash help and the credibility for repayment.