UK Loan Online Decision Bad Credit History

An unsecured loan is precisely what it suggests, a loan 'not secured' on your home, that you can use as you want. People often use them to get a car, a special holiday, house renovations, or even to pay off costly credit card debts at one time, therefore giving you freedom to extend the repayments over a longer period at a lower interest charge.

With an unsecured loan, how much money can I borrow?
You can typically take out an unsecured loan for up to £15,000 (if you have a good credit rating) however, a number of unsecured lenders can grant you up to £25,000 unsecured (if you have an EXCELLENT credit rating). However, bear in mind that you are required to be able to afford all the loan repayments. With unsecured loan applications, you can normally get approval in principle over the phone.

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What are the maximum & minimum repayment terms for an unsecured loan?
In part this depends on the unsecured loan provider. A number of unsecured lenders could provide an unsecured loan for as little as 12 months, though a 5 to 7 year term is more usual. The maximum unsecured loan term is usually seven years but some unsecured lenders will advance an unsecured loan over 10 years. Unsecured loans are more suitable for applicants who want to repay the loan over a few years. For people who only need the money for a short period, for example, six months, borrowing from a credit card may be better.

How does an unsecured loan interest rate operate?
Unsecured loan interest rates are usually fixed for the length of the unsecured loan contract, which means you know exactly the amount you are required to repay every month. The disadvantage is that you might possibly repay more than borrowers who take out a similar unsecured loan in six months' time - on the other hand, you may very well pay less! Either way, you will not need to be anxious about unsecured loan repayments increasing. Some unsecured loan companies will request that you take out a direct debit for the loan repayments. Generally, the loan interest rate is less when you borrow a bigger unsecured loan amount. With unsecured loans, the most significant factor to be aware of is the Annual Percentage Rate (APR). It's also important to consider the amount the unsecured loan will cost you in total.

Will there be a credit score check?
Yes, unsecured lenders want to ensure that loan applicants represent a 'low risk' and therefore don't carry a record of bad debts and overdue debts. To achieve this, the unsecured loan company will check your credit file from a credit reference agency - CallCredit plc, Equifax or Experian. A poor credit history won't necessarily hinder you from obtaining an unsecured loan, but you will most likely be charged a higher rate of interest. You may find it harder to get approved for an unsecured personal loan if you are self-employed or if you are just starting a new employment contract.

What is an unsecured loan protection insurance?
This is an insurance you can take out to pay (under certain conditions) the unsecured loan monthly repayments if you cannot - for example, when you have lost your job. Think with care whether you genuinely need this. Unsecured loan payment protection insurance (a bundle with the loan) is often costly and if your financial situation is precarious, is it the best move for you to be borrowing more money anyway? If you do want a loan payment protection plan, ask about exclusions and small print which might make it harder for you to benefit from the cover.

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