High Risk Borrowers Resort to Unsecured Loans

High risk borrowers can make use of funds for meeting important financial obligations such as consolidating debts, financing education, home renovation, buying car, or even for business expansion. Loans can had up to $25,000.

If you have a less than sterling credit history, you can still land a large unsecured loan. Because of these financially turbulent times, many people have had to take some bad hits on their credit records, often due to a period of unemployment or a financial investment gone awry because of restricted markets.

Arrears, late payments, missed payments, defaults, and even bankruptcies cloud the credit records of some of these folks, making them high risk borrowers. Many people have had these financial pangs and tend to be rejected by many lenders when they attempt to secure a high risk unsecured loan.

Online Lenders Ready for High Risk Unsecured Loans

Traditional brick and mortar lenders such as banks and credit unions have tightened their credit requirements since the housing bust and even good credit borrowers can have a tough time wresting an unsecured loan from them. So, a good place to start your search would be to go online. Private lending companies have stepped in to fill the gap left by the traditional lenders and many of them have set up shop online. As with any online transaction, check the security of the sites and the reputation of the lenders.

In fact, the market for high risk unsecured loans is so great that the many lenders offering such loans have to face some tough competition. You will be able to shop around for lenders with the lowest interest rates and the most comfortable repayment terms. You will even find brokers who will take your general information and provide you with a list of lenders who will probably lend to you based on the information given. Compare quotes and terms to find the most suitable deal.

Facts on High Risk Unsecured Loans

Since no collateral is required for these loans, and since the borrower already has a poor history regarding repayment, the lenders have to adjust their rates to cover the risk. Secured loans offer collateral which the lender can seize should the borrower default. Thus those loans tend to have lower interest rate because of the security offered to the lender. With the high risk of unsecured loans, you will find interest rates to be considerably higher than what the loan market usually offers.

Online application for high risk borrowers in need of unsecured loans is wonderfully easy and quick. You will need to offer documentation regarding your identification, your job history and present salary, proof of residency, and access to an active bank account (usually a checking account with direct deposit), and of course, your social security number. Often approvals are made in a matter of minutes and funds can be in a bank account within 24 hours, sometimes sooner.

Using Your High Risk Unsecured Loan

Hopefully you will have done your budget homework and requested just the amount you need with payments that are comfortable. These loans can range from $1,000 to $25,000, depending on your salary and your financial situation. The terms of repayment can range from 1-10 years. Remember that the longer the time and the lower the payments, the more interest you will be paying. Since you are a high risk borrower, repaying such a loan can improve your credit history to a great degree. Timely and regular payments will also make it easier for you to get such a loan in the future should you need it.

Unsecured Credit Line for Businesses

Starting up a business is a bit of challenge in financing. Sometimes emergency cash is not enough, that's why business owners must consider acquiring an unsecured line of credit.

Financing the business is one of the toughest challenges a business owner must face.  Whether you are running a new business, a start-up one, or even an established company, there will always be the need for financing.

Indeed, the need for cash will always arise and at times, the business owner will be confronted with this challenge when it is least expected.  For this reason, business owners are advised to seek an unsecured line of credit with a trusted lending company, to make sure that there is a reliable financial resource that they can turn to at any time.

Many lending companies in the market offer various types of business financing, including an unsecured line of credit.  Some lenders require the business to be at least two years in existence to be given this type of financing.  Another important factor is credit history. Good personal and business credit standing are important in order to qualify for an unsecured line of credit.

An unsecured credit line can be used to cover for various expenses such as purchasing additional equipment, stocks or raw materials, improving the office space, and other unexpected expenses.  Once approved for a business line of credit, the business owner can make cash advances at any time without the need to go through the whole process of reapplication.  There is no need to wait for months for the approval of your loan application. 

Business Credit Cards – Unsecured Credit Line for Businesses

Small business credit cards are a great example of an unsecured credit line for business.  Unlike business loans, it is much easier to get approved for a small business credit card even for those with no business credit.  In fact, small business credit cards are the exact tools you need to start building corporate credit.

In the absence of business credit, the personal credit history of the business owner will be closely evaluated.  Of course, the higher your credit score is, the more you are likely to get approved for an unsecured small business credit card with good rates.

On the other hand, for those with bad credit rating, secured small business credit cards can be used to rebuild bad credit.  To get a secured credit card for business, you only need to submit a security cash deposit to your account.  Generally, the value of your security cash deposit will also determine the amount of your credit line.

Another essential factor to consider is to find a business credit card that will report your payments to major business credit trackers like Dun & Bradstreet- the leading business credit tracker in the country.  This way, you can build up your business credit as you pay your bills using your small business credit card.

By obtaining an unsecured business line of credit, the business owner is given the flexibility to manage debts and repayment in an efficient way.  However, it is important to remember that managing a revolving credit can also be a challenge that can make or break your business credit standing.

Personal Loans Financing

Many consulters suggest that one should resort to personal loans for financing trips or vacations instead of other financial products like credit cards. Such suggestion is undoubtedly well founded but...

Many consulters suggest that one should resort to personal loans for financing trips or vacations instead of other financial products like credit cards. Such suggestion is undoubtedly well founded but not everybody knows the reasons that justify the advice. The costs of financing should be measured both by comparing the overall amounts spent on interests but also by how the monthly payments affect the borrower’s budget.

Personal loans present significant advantages when compared to credit cards for financing trips. However, there are many considerations to be taken into account, especially when there are certain promotions by credit card companies that can offer more benefits than paying the whole trip in cash and in advance. Therefore, there is no general answer to the question: should I pay with credit card or take a personal loan? It will all depend on the particular case.

The Interest Rate Issue

Personal loans tend to charge lower interest rates than those charged by financing unpaid credit card balances. While credit cards can charge up to 20% APR or even more, personal unsecured loans rarely exceed 10% or 12% APR. Thus, financing your trip by taking a personal loan will end up being significantly cheaper unless you repay your credit card balance within a short period of time.

Moreover, personal loans come either with a variable interest rate or a fixed interest rate. By requesting a variable interest rate personal loan you can get significantly lower rates. However, you need to bear in mind that variable rates can increase suddenly due to market variations and you might end up paying more than what you would have paid if you selected a fixed interest rate personal loan.

The Monthly Payment Issue

The advantage of personal loans when it comes to monthly payments is that the installments are fixed which is perfect for those with little discipline that always feel tempted to pay only the minimum payments on their credit cards and keep spending without control. This way you will know exactly how much you owe every month and you will be able to repay your debt sooner. Obviously, some will prefer the flexibility that credit cards provide. It all depends on how much self-control you have.

But, besides the discipline issue, fixed personal loan monthly payments are a lot easier to budget and since as explained above, the interest rate is lower, smart borrowers will prefer it over credit card financing. The monthly payments can be easily included in the budget and calculated as an additional expense letting the applicant to make the necessary previsions to afford the payments without hassles.

Credit Card Offers From Time To Time

Often, agencies agree with credit card issuers and present offers for credit card holders that excel the advantages that can be obtained by financing with a personal loan. In such cases, after you have considered the offer carefully and watched for any hidden cost that agencies like to conceal on the fine print of the contracts, you can assuredly choose credit card financing over taking a personal loan. Other than that, it is always advisable to use a personal loan unless you can not afford the monthly payments or you do not meet the requirements for approval.