Quick Unsecured Loans
Quick unsecured loans are available from many lenders online and can be of help to those who cannot qualify for a lower cost secure loan through a bank or traditional lending company. The online paycheck advance lenders offer quick money advances with only electronic signatures and the brick and mortar lenders offer the same loan based on a personal check left with the lender to be cashed fourteen days later. These are fast and unsecured loans for small amounts of money, usually no more than fifteen hundred dollars. These loans have up to eleven hundred percent annual interest rates, making them very expensive lending agreements. But there is another type of signature loan that is offered for a larger loan amount, but they are also very expensive.
The fast no collateral loans offered by paycheck advance lenders require no credit checks and no debt to income ratio investigation by the lender regarding the borrower. However, the larger no collateral loans are tied to a customer's credit score and debt to income ratio. The lenders offering these money advances are much more liberal on their lending policies than banks and credit unions, but they also do not give loans to anyone with just a picture ID and a checking account. In other words, these kinds of quick unsecured loans are for those with some grass stains on their borrowing records but have not been rolling in the mud so to speak. The combination of lower credit scores, higher debt to income ratios and no collateral requirements means that the cost of these lending agreements will be very high.
It is difficult to ascertain just what the credit score requirements might have to be in qualifying for these lending agreements but there are some things that are known. According to financial experts, the average credit score in America is six hundred and twenty. The lowest score possible is five hundred and the highest is eight hundred. Banks are hesitant to consider those borrowers with less than a six hundred and forty score, but each bank is different with their credit policies and much will have to do with how much the borrower has in savings, retirement, etc. The average borrower with a 620 credit score may or may not qualify for bank lending agreements, but the range of five hundred ninety to six hundred twenty definitely will not qualify for the lower interest loans offered by banking institutions. It is this range of borrower score that is the niche market for those offering larger quick unsecured loans. Remember that these figures are only for informational purposes and every lender should be investigated for its own requirements.
While the paycheck advance lenders do not care about the debt to income ratio for its borrowers, the lenders offering quick unsecured loans make that investigation a routine part of the qualifying process. A borrower may have few red marks on a credit history, but the fact that he has a large number of credit payments that must be made each month may actually bring down the credit score sizably. In other words, in the credit world making timely monthly installment payments and having few late payments over the course of years is not enough to qualify for more money. The debt to income ratio is a major factor. If the monthly credit card, house, car, education and other credit expenditure are more than forty percent of an individual's income, the red flags start waving from all over the computer screen. Below average credit scores and high debt to income ratios may wipe out any hope of qualifying for quick unsecured loans.
The attraction for someone getting quick unsecured loans is that they require no collateral. For example, someone is a renter and does not own a house and the automobile that she possesses has little value so the attraction to quick unsecured loans is very strong. If this woman has very few debts and an above minimum wage job, she may qualify for a three or four thousand dollar loan. If she does and the APR is about thirty five percent, which may be low with some lending companies, the borrower can expect to pay about one hundred and seventeen dollars a month for forty eight months. This borrower will pay five thousand six hundred and sixteen dollars for this loan over four years. The same loan amount at a bank, available to those with better than average credit scores, with an eight percent interest rate would be a total of about thirty five hundred dollars for four years with payments of seventy three dollars and change each month. "Jesus answered and said unto him, "If a man love me, he will keep my words: and my Father will love him and we will come unto him and make our abode with him." (John 14:23)
Some lenders of quick unsecured loans offer a ten thousand dollar loan with a ten year payback at fifty nine percent interest. The loan repayment is four hundred and ninety three dollars for a whopping fifty nine thousand dollars total cost for a ten thousand dollar loan. Why so high? The lender assumes a very high risk with no collateral and a borrower who has perhaps a shaky past in repayment of loans either on time or perhaps even a default. Financial experts everywhere plead with potential borrowers looking at quick no collateral lending agreements to explore every possibility at reducing expenses to pay for whatever needs that caused the reason for the loan in the first place. And if that is not possible, seek a money expert to help figure out other options. By the way, a bank loan for the same ten thousand dollars at nine percent interest would cost a total of a little over fourteen thousand dollars at a hundred and twenty six dollars a month.