If you do not own a property nor despite owning do not wish to take a loan against it then you have to opt for an unsecured loan which may come with harder conditions laid down by the lender. The loan comes with harder terms if you are labeled poor credit. But not in the case of poor credit unsecured loan which is especially designed considering fragile financial conditions such borrowers are in. Poor credit unsecured loan can be utilized for whatever purpose like buying vehicle, clearing medical bills, enjoying holiday tour and renovation of home. Tenants and homeowners both are equally eligible for the loan.
Borrowers are not required to place any collateral with the lender to avail poor credit unsecured loan. Instead they are supposed to assure about their loan repayment capacity and intentions to pay back the loan. To this they should produce proof of their employment, annual income and may be financial standing if any to the lender. Once the lender verifies the details, poor credit unsecured loan is approved in time.
The loan amount under poor credit unsecured loan depends on repayment capacity of the borrower. The loan is offered for a shorter period. Interest rate on the loan remains higher because the lender needs to cover the risks involved. However, as normally smaller amount is availed for a shorter period the borrower does not feel the burden of higher interest rate.
Poor credit happens when a borrower repeatedly defaults on payments and faces CCJs or files for bankruptcy. This is represented in his credit report and credit score. On FICO scale, credit score ranges from 300 to 850 with score below 600 labeled as poor credit and is considered as full of risk for a loan offer. Before rushing to the lender better take a copy of credit report from reputed credit rating agency and check it for inaccuracies. Also pay off easy debts if possible as this way credit score goes up and your intentions to clear debts impresses the lender and he can relax loan conditions more.
To take the loan at better terms, prefer applying online. You get number of loan offers in response to the application and can settle for the lender having comparatively lower interest rate. Your cost of availing loan also goes down as online lenders charge no fee on processing of the loan or giving detailed information.
Poor credit unsecured loan enables you in availing finance at comparatively lower interest rate and low cost despite your poor credit. If paid off in time the loan goes a long way in improving credit score also.