Unsecured loan bad credit

The terms unsecured and cheap cannot usually be used to describe the same loan. Usually in granting an unsecured loan a bank is taking a greater risk with you and will therefore charge more interest. This may be about 2-5% more per annum than a secured loan for the same amount.

It may be harder for someone without employment or a regular income to obtain an unsecured loan as you do not have a means to repay the loan. If you also have bad credit, your chances or obtaining this loan are going to be even less. Unsecured loans for people with bad credit will almost definitely have very high interest rates as someone with bad credit and no security you would pose the biggest risk for the bank.

Unsecured loans, especially for people with bad credit are likely to be of lower value in the region of a few hundred pounds. This is another way that the banks can limit their risk, by lending only small amounts at this high risk level. If you need a larger loan amount or a lower interest rate it will pay to shop around.

Loans that are unsecured are offered by many institutions on the internet, the local paper and on the high street. Make sure they are governed by the correct government body. In the UK institutions that lend money need to be approved by the FSA.

If you can you should seek a secured loan securing the loan to property of some kind. These types of loans, the secured loan will have the better rate of interest as the banks and lending institutions are taking less of a risk as they can gain possession of your property if you default on the loan. Here you the borrower are taking the risk, offering up your property in exchange for a lower interest rate for the loan.