Do Unsecured Loans Really Hold Great Power in Today's Tight Credit Market
Unsecured loans are one of the top financial products around... or they used to be. The economy has slowed down, making lenders a lot more careful about how they blend money.
Unsecured loans mean that you really don't have any collateral to put up. As long as you satisfy the other terms of the credit offer, you will get things handled just fine.
This is a good deal for the consumer but a very bad deal for the lender. The lender has to hope that you're going to keep your end of the bargain. While it's true that they have legal recourse in the event that you don't pay, the reality is that these methods can often run into a dead end. They can often make it hard for the lender to really collect anything from you.
This is a cautious era for a lot of people, lenders included. But there are ways to get higher lender confidence, and that would be to put up collateral. Does that mean that the unsecured loan is dead? Not necessarily! You might be able to negotiate for an unsecured offer under the following circumstances:
Very Good Credit
When you have a good credit score, the world of unsecured loans seems to open up for you big time. There's nothing like being able to control your own world by getting a good credit score.
Even if you've fallen on some hard times, the important thing here is to try to fix the damage before it's too late. A lot of people think that they're going to fix everything just by hoping for the best. This is clearly not the way to go.
Make sure that you're getting a copy of your creating rating and customer file indicating the status of your payment history at least once a year. Check it for errors. You might be surprised at how many errors do indeed come up when it comes to this sort of thing.
Rock Solid Employment
If you've been employed at the same job for multiple years, you are a good target for unsecured loans. Lenders feel better when you haven't hopped from job to job to job. It shows that you're settling down, taking things in stride, and planning for the future. All good things in a lender's book, honestly.
Modestly Decent Income
Income isn't just about how much you make -- it's how much you keep. We're not just talking about your take home pay, the average amount that you except to keep after taxes. We're talking about all of the essential expenses that you have to pay.
The more cash flow that you have left over from paying your bills, the more likely it is that you will get approved for the loan. It's the people who don't leave a lot of money left over after taking care of their bills that make the lenders nervous.
After all, what happens when disaster strikes? You will not pay them back -- concentrating instead on your essentials. While the lenders understand the need for survival, this is still not a good thing for their business.
Overall, you'll find that unsecured loans are possible, but you might have to jump through some extra hoops to get them. However, if you're dead set against putting up collateral, then unsecured loans are going to have to be the way to go from here. Good luck!