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Unsecured loans for people with bad credit

Unsecured loans for bad credit aren't the best form of finance, but it doesn't mean they aren't available at all. Normally, a lender will need some kind of collatoral to use to secure the loan if you have a history of non-payment (bad credit), such as your house, but since an unsecured loan doesn't require anything as security the lender is at risk of losing money. So, to deter people who can't afford the loan and to help recover some of the original loan in the first few months, lenders put a higher APR on bad credit loans.

 

Features of a Bad Credit Loan

Unsecured loans for people with bad credit normally have:

  • A higher interest rate than other loans, sometimes over 60% APR.
  • A requirement for a guarantor to secure the finance in some cases.
  • Less flexibility and less amounts available than other secured loans.

 

Obtaining Unsecured Loans for Bad Credit

You can either have a look yourself for bad credit loans or use a specialist broker. Brokers may charge a fee, but if you use companies that have a history of good service you're likely to find yourself a loan.

Loan brokers have the ability to search thousands of potential providers for you based on your information. They can't guarantee a decision from every provider but a good loan broker company will not take any payment until you have secured a loan. As specialist providers they can also communicate with providers for you and come to a fair deal for both parties, or suggest alternatives that may be ideal for your situation. You should try local broker companies, or online broker companies with excellent customer reviews.

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