Bad credit unsecured loans
Bad credit unsecured loans? Suggest such things to many people and they might look at you as though you had two heads.
They might also think the promoter of a UK credit card has two heads, too. The card, launched by a door-to-door lender that targets people without bank accounts, carries interest rates of up to 69.5%...plus a £19 annual fee. Who might be tempted to sign up for such a card? Those who have frequently been turned down by other lenders due to debt problems. Where will they be found? From the lists of one of the credit reporting agencies in the UK.
High interest can push some families over the edge
The company's managing director said at the time of the launch that the problem with credit card lending is not the interest rate but the amount of money that is lent. His card has a starting credit limit of £150. Of course, at these rates, this card will always represent last-resort credit. Add an additional £150 and its enormous interest rate to other debts, and even this small amount may be enough to push many families over the edge.
Bad credit unsecured loans are always going to cost more than secured loans to borrowers with excellent credit. No one will be surprised by that. And there are plenty of companies ready to make these types of loans. One website advertises more than 80 little-known banks and companies that offer bad credit unsecured loans, many of which require no collateral and no co-signers. They don't even require a person to own a home. It also has a list of more than 50 financial firms that offer bad credit unsecured credit cards - even for those who have declared bankruptcy.
Other sites offer home loans and car loans with no money down and no credit checks.
If you never borrow money, you have a poor credit record
Bad credit unsecured loans are not only for those who have had trouble paying their bills. As far as lenders are concerned, if you have never borrowed money you have a poor credit rating. First-time borrowers can have a difficult time getting standard loans. The lenders have no idea whether you will pay your bills on time, or simply walk away from what you owe. If you fall into this category (and we all have at some time), bad credit unsecured loans could help you to establish a good credit rating so that you can eventually get cheaper rates when you need to borrow in future. All you need to do is make regular payments on time, and the rest will take care of itself.
The issue of bad credit unsecured loans is a two-edged sword. On the one hand, lenders need to protect themselves and cover the extra costs that are inevitable with these sorts of loans. And on the other hand, there are times in this credit-driven civilization that deserving people need loans badly, almost regardless of the cost. The trick is to balance needs and wants sensibly. You might need new tyres for your car but, although you may be tired, a vacation in the sun is a want, not a need.
Would you buy a £100 dress for £200?
A purchase can be a need or a want. It can even be both. But debt is a negative acquisition. Use it carefully. One way to look at it is this: if you saw a £100 dress on sale for £200, would you consider it a smart buy? Given how long some people carry debt on their credit cards, it could cost you that or more by the time you finish paying for it, if your first impulse is to "charge it". Best save the cash first, then see if you can get a discount.
