Borrowers shopping around for cheaper loan solutions should start looking into an unsecured personal loan. With borrowing costs still low anyone with a decent credit rating can get access to credit. The beauty of opting for the unsecured personal loan option is in its malleable nature.
Borrow what you need
Gone are the days where you can borrow a set amount of credit. Lenders have realised the nature of the consumers are constantly changing. Borrowers now come in all shapes and sizes. Some have excellent credit rating and require a short amount of loan for a short period.
Meanwhile some borrowers may have the misfortune of building up bad credit but looking to rebuild their credentials by demonstrating prudent financial behaviour.
This is why unsecured loans are dubbed the flexible lending option. Each case is examined on its own merit. Another vital aspect is the lack of requirement to own a property as security against the loan. This means the application process is swift and the applicant will get a decision relatively fast.
Once your application gets accepted and you obtain the loan, you always have the opportunity to make the full repayments as early as possible. Reducing the borrowing costs has to be one of the main attractions of any loan solution. This is definitely why getting an unsecured personal loan is so attractive to many customers.
For an unsecured loan, the typical representative APR is 47.9%. This means if you borrow £3,000 over 3 years, the monthly payment will be £143.98. Interest payable £2,183.28. Total repayable £5,183.28. Annual Interest Rate 39.8% fixed.
Essentially, unsecured loans are poor credit loans. You will be paying a premium interest rate on this type of borrowing.
Of course the above is just an example to show you the complete breakdown of repayment and total costs. To take advantage of unsecured personal loan, borrowers are advised to make the loan payable between three to five year periods. The shorter the term the higher the interest you will end up with.
Shopping around is definitely a wise move before you finally decide to opt for an unsecured loan. You may find yourself a suitable deal for your individual circumstances.
Beware of consequences
One word of caution for anyone looking to obtain an unsecured loan is the adverse effect you have to face when you fail to make repayments. Your credit history will take a big hit which means your chances of borrowing money with the best rates will be decreased. You must avoid such a feat at any cost.
Once your credit history is tarnished you will have to start to rebuild your credit again. This means getting loans with high interest. It will be a slow process to get back to where you were when you applied with solid credit record. It’s like getting released from the premier league and trying to get promoted from the championship. Good luck with that.
For those who have existing debts, getting an unsecured personal loan may not be the ideal scenario as it will inevitably lead to further debt. Taking too many loans could get you in financial difficulty. Always borrow money from a position of strength not weakness. It’s the best way. It’s the only way.