Debt Management Service For Non Payment Unsecured Debt
An unsecured loan is precisely what it suggests, a loan 'not secured' on your home, for you to spend as you wish. People often use them to pay for a new car, a dream holiday, home improvements, or maybe to settle spiralling credit card bills in one go, therefore letting you to spread the payments over a longer period at a lower APR.
With an unsecured loan, how much is it possible to borrow?
You can usually take out an unsecured loan for up to £15,000 (if you have a good credit record) however, some unsecured lenders can grant you as much as £25,000 unsecured (if you have an EXCELLENT credit record). Then again, don't forget that you have to have the financial means to make all the loan repayments. With unsecured loan applications, you can normally be approved in principle over the phone.
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What are the min/max repayment terms for an unsecured loan?
This partly depends on the unsecured loan company. Some unsecured lenders could grant an unsecured loan for as little as one year, though a 5 to 7 year term is more frequent. The maximum unsecured loan term is generally 7 years but some unsecured lenders will lend over 10 years. Unsecured loans are suitable for those who want to repay something over a few years. For people who only want the money for a period of, for instance, 6 months, purchasing with your credit card may be better.
How does the unsecured interest rate work?
Unsecured loan APRs are normally fixed for the whole term of the unsecured lending agreement, which means you know precisely the amount you must repay per month. The disadvantage is that you could repay more than other borrowers who take out a similar unsecured loan amount in 6 months' time - on the other hand, you may very well pay less! Either way, you do not have to worry about your unsecured loan payments soaring. A lot of unsecured loan providers will insist that you set up a direct debit for the loan payments. Typically, the rate of interest is less if you take out a larger unsecured loan amount. With unsecured loans, the most important element to be aware of is the Annual Percentage Rate (APR). In addition, it is important to know the amount the unsecured loan will cost you in total.
Will I have to pass a credit score check?
Yes, unsecured loan companies have to be certain that applicants represent a 'good risk' and therefore do not have a past of bad credit and unpaid debts. To achieve this, the unsecured loan provider will check your credit file from a credit reference agency - CallCredit plc, Equifax or Experian. An impaired credit past won't inevitably prevent you from obtaining an unsecured personal loan nonetheless, you will probably be given an increased unsecured loan interest rate. You might find it more difficult to get approved for an unsecured loan if you are a sole trader or if you have a short term employment contract.
What is an unsecured loan payment protection insurance?
This is an insurance policy you can purchase to pay for (under certain conditions) the unsecured loan monthly repayments in the event you are incapable of doing so - for instance, if you've lost your job. Think with care if you really require this. Unsecured loan payment protection insurance (a bundle with the loan) is frequently costly and if your financial position is unsteady, is it wise to be borrowing more money on top of it all? Should you decide you do need a payment protection insurance, ask about exclusions and small print which might make it hard for you to benefit from the insurance.
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