If you have a poor credit history and do not own your own home, then when looking to borrow money you might have to consider bad credit unsecured loans. These are specifically for people who have a damaged credit record but have good enough credit ratings to be able to apply for an unsecured loan - even homeowners with bad credit could - who could get adverse credit homeowner loans - often opt for an unsecured loan because it means they do not have to put their home at risk if they default on the repayments. People with a very bad credit history might not be able to get an unsecured loan, and will only be able to borrow if they own a home or are able to pay very expensive interest rates.
Also, by keeping up with repayments on a bad credit unsecured loan, you will be able to start rebuilding your credit history by proving that you have become more creditworthy, and therefore become eligible for better deals if you need credit again in the future.
Advantages of bad credit unsecured loans:
- Can help you to rebuild your credit history
- Allows you to borrow money if other avenues are closed
- Competitive fixed rates available
Disadvantages of bad credit unsecured loans:
- Interest rates are higher than on mainstream loans and bad credit secured loans
- You can damage your credit further if you miss payments
- You might not be able to borrow as much as with a homeowner loan
How much do bad credit unsecured loans cost?
If you have a bad credit record but you own your own home, you can secure your borrowings against your property and get a lower rate than with an unsecured loan, but you open yourself up to the risk that if you do default on your repayments, your home could be repossessed. A bad credit unsecured loan generally costs more than a secured loan, but the risk is much lower. Also, you will get a fixed rate so you will know how much it will cost in the long run and how long it will take to repay it. Because bad credit unsecured loans have variable interest rates, it can take longer than expected to repay and cost more than you thought. With a bad credit unsecured loan, you might pay a higher interest rate, but at least you know where you are and that they payments and term will not change.
How do I know if I am getting a good deal on bad credit unsecured loans?
The best bad credit unsecured loan for you will depend on your needs, such as how much you want to borrow, over what term, and exactly how bad your credit status is. To find the best deals available, use our free bad credit unsecured loans comparison service:
- Fill in the quick form
- A loan specialist will search the market
- You get free, no obligation loan quotes
To find the best loan for your situation, click on the link below and fill in the form to compare bad credit loans - you will be contacted by one of our bad credit unsecured loan specialists who will search the market to find you a the best deal for your circumstances and requirements.