
Looking for unsecured loans is an uncertain business for all of
us. Generally, success with an application rests on our credit history
and our stated salary, but there are no guarantees at all, and at times
it might seem like a complete lottery.
It seems only logical then
that getting approval for unsecured financing of any kind is an
impossibility for those of us with poor credit rating. After all, the
confidence that a history of meeting monthly payment obligations and
repaying a loan is gone, so there is nothing that a lender can rely on.
But
the fact is that approval for loans that are unsecured is possible,
even for those with a poor credit history. However, a few steps made on
behalf of the applicant and some extra conditions imposed by the lender,
can both be expected.
Approval Requirements
Getting
approval for any kind of loan e.g. payday loans, cash loans and unsecured loans is a challenge, but it is generally
accepted that having collateral makes the whole process much easier.
Getting approval for unsecured loans should be a nerve jangling
experience, but in some cases it can actually be less troublesome.
However, the surprising fact is that credit history is not always a
requirement for unsecured loans, especially when the loan is being
offered online.
This is because the only concern for the lender is
that the applicant has a proof of income and a bank account from which
the monthly payment can be withdrawn automatically on a set date. With
the responsibility for making the payment taken out of the hands of the
borrower, approval for loans that are unsecured is effectively
guaranteed.
Still, not every lender is so generous. Tougher terms
typically exist, such as lower limits and a higher interest rate, with
the lack of collateral meaning that a credit rating is a central factor
in gaining approval for unsecured financing. Of course, there are a
number of things that can be done to bypass this too.
Getting a Co Signer
Probably
the easiest route around the problem of unsecured loan approval is to
get someone with a good credit rating to become a co signer on the loan.
This means that should the applicant fail to make payments, the co
signer will pay on their behalf.
Getting approval for loans that
are unsecured is certainly made easier with that kind of backup. For
many people that means approaching a family member who trusts them and
knows that the unsecured loan will be paid, but are willing to foot the
bill if necessary.
Improving Credit Rating
A second
step towards approval for unsecured financing is to actually improve
your own credit rating. This is certainly not simple, and will take time
to accomplish. A recent track record of making payments on time is
needed, with a period of 6 months the normal duration. That effectively
means waiting for 6 months before seeking approval for unsecured loans
again.
There may be some effort required, but bad credit history
is not the end to loan approval that everyone seems to think it is. In
fact, unsecured loan approval is still very much possible, provided the
applicant has either time on their side, a trusting co signer or a
lender that is willing to turn a blind eye to credit history and insist
on automatic unsecured loan repayments direct from their bank account.
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