Finance

Unsecured consumer loans with bad debt

With credit cards in the life of everyone there are times that the consumer gets tempted to take a credit or loan on it. And when they are not able to pay them back on time they try to clear the bill by getting a loan from someone or take a personal/consumer loan from a different source. This is because the credit card companies charge a bomb in the form of interest on the loan amount.

Unsecured loans let you borrow money for anything. That is the reason they are also called personal loans which mean the reason for the loan is person specific and depends on why he needs that loan at that point in time. This type of loan does not have any collateral and is based solely on the credibility of the person in general. When the credit score of the borrower is high the chances of getting such unsecured loans and the amount of loan he gets is high. At the same time when one has a bad credit score it doesn’t mean that they won’t be able to get unsecured loan but it’s a tad bit difficult.

A bad credit is due to not paying the instalments on time or not maintaining the minimum balances in your account or even due to foreclosing of loans. You can build the score from bad to good by knowing what your score is andpaying back dues, by not opening accounts that you really do not need etc. It is always wise to set reminders and pay bills on time. This will let you keep your active accounts current and your credit score will improve. But when you have been continuously having a bad score then it might take time to correct your score and you might need a loan very urgently. That’s where a co-applicant comes into picture.

How to get an unsecured loan with bad debt at hand

When you apply for an unsecured loan, the first thing they look at is your credit score. The lender decides whether to give you a loan or not based on your credit score and on how much are your income and the type. If you have a stable income and still have a bad debt then you will get the loan but with a higher rate of interest.

Apart from this you have an option of getting the loan if there is a friend or relative who can co-sign for the loan. But that person will have to remember and understand that he will be liable for the loan if you default. If there is a co-applicant then the rate of interest is also lower than when trying to get a loan all alone.

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