Unsecured Installment Loans

When money is tight, unsecured installment loans might just be the answer for cash-strapped consumers with bad payment histories. Consumers with low credit scores can have difficulty getting financed for a home, car, or to pay off delinquent debts, because prime lenders won't touch them with a ten-foot pole. But lenders who are willing to take a chance on high-risk borrowers can be a lifeline for those who are striving to get out of a sea of debt. Unsecured installment loans provide financing without collateral or good credit. And when lenders make it easy to obtain financing without the usual criteria, consumers are provided a much needed second chance to get back on the right road to financial stability. Similarly, God provides sinners a second chance at redemption through an acceptance of Jesus Christ. "Christ hath redeemed us from the curse of the law, being made a curse for us: for it is written, Cursed is every one that hangeth on a tree: That the blessing of Abraham might come on the Gentiles through Jesus Christ; that we might receive the promise of the Spirit through faith" (Galatians 3:13-14).

Finance companies offer high-risk borrowers redemption from bad credit, but there is a price to be paid. Unlike the free gift of salvation through Jesus Christ, lenders charge high interest rates in exchange for unsecured loans in order to recoup monies even if borrowers are unable to fully repay. What some would term as exorbitant interest provides a measure of compensation for lenders willing to gamble on consumers with bad payment histories. Some hard money lenders charge as much as 30% to 40% interest to high-risk borrowers; while sub-prime lending institutions tend to be more lenient. Unsecured installment loans extended by sub-prime agencies carry lower interest rates and possibly 100% financing. To make money, some lenders also charge application, administration, and processing fees and late charges for payments that are past due. But in spite of the high interest rate and processing fees, poor credit borrowers can take advantage of no-collateral financing to consolidate and pay off bills that take a bite out of a maxed out budget. Funds can reduce medical and health expenses, or wipe out student loans or delinquent back taxes to the Internal Revenue Service. And the more debt cleared from consumer credit reports, the easier financing will be for poor credit consumers in the future.

Borrowers can also benefit by unsecured financing to buy some time to clean up credit reports and boost scores. Some consumers are just a few thousand dollars away from reestablishing good creditworthiness; and bills that have lingered year after year because of an inability to amass sufficient funds can disappear overnight. Second chance financing can erase debts incurred as a result of chronic illness, accidents, divorce, or job losses, which can happen to anyone at any time. Layoffs and job loss due to business closures, unexpected medical bills, or even the death of a spouse can wreak havoc with a family's finances and plunge them into despair. But unsecured installment loans can mean the difference between surviving or succumbing to a financial catastrophe.

Borrowers seeking debt relief can apply for financing online or through a local company. Most agencies will ask for proof of employment, banking information, and personal details, such as a listing of major creditors and outstanding account balances. Consumers can browse online sites to compare rates and find information on qualifying requirements. High-risk borrowers must be at least 18 years of age, currently have a steady income of a minimum dollar amount each month, and have a checking or savings for direct deposit of electronic funds. An established bank account also enables monthly payments for unsecured installment loans to be automatically withdrawn from the borrower's account on each due date.

The application and pre-approval process for obtaining unsecured installment loans online is usually faster than applying at a local company. Most neighboring agencies require filling out mounds of paperwork and waiting days before approving applications, but Internet lenders may process paperwork a lot faster, approving loans within minutes. Using the borrower's personal financial data, web-based lenders can get lightning fast results and issue electronic funds, usually within the next business day. Electronic payment can be directly deposited into borrowers' bank accounts or securely mailed to recipients. Consistent payment of installments via the Internet also provides an ironclad record of a high-risk borrower's effort to faithfully repay debts.

These types of collateral-free unsecured loans can help bail out consumers with serious money problems, restore creditworthiness, and eventually help them qualify for prime lending rates. While no one likes borrowing money, especially with high interest, unsecured installment loans could be a consumer's only way to get out of debt and obtain redemption from past financial mistakes. Lenders who provide unsecured loans are taking a gamble on consumers with poor payment histories; but the finance charges add cash to their coffers. In addition, lenders who give high-risk borrowers a second chance and a helping hand indirectly boost a national economy which depends largely on consumerism. Freeing customers from the burden of overwhelming debt enables them to spend more money on goods and services; and that cash or credit helps to stimulate the economy. Borrowers who succeed in reestablishing creditworthiness via unsecured installment loans may be less likely to incur personal or business indebtedness in the future. By carefully weighing repayment options and terms, debtors can get free from crushing debt and realize financial freedom.

Unsecured Personal Loan Interest Rates

Unsecured personal loan interest rates are much different than secured ones because the loans have no collateral to back them up, which causes the unsecured percentage to be much higher than that on a secured amount. Although this may be a downside, consumers should keep in mind that the unsecured personal loan interest rate is usually high because it is only a short period of time. The percentage actually does vary from lender to lender. One question that one may have is if there is a maximum percentage. That depends on the type of personal loan desired.

Percentages vary on what one borrows. Credit card companies are allowed to charge pretty much whatever rates they want to as long as it is specified in the written portion of the agreement. Banks and credit unions also set their interest rates however they wish, providing it is listed in the written agreement. If the interest rate is not secured in writing, then the legal rate of 7 percent each year goes into effect. Because unsecured personal loan interest rates do vary, compare percentages before deciding on a particular loan. This lending may have it's downside but when the borrower doesn't want to have to put up their home or automobile as collateral, or doesn't have those items to put up, he or she must be willing to pay the slightly higher unsecured personal loan interest rates.

Unsecured rates usually only apply to smaller borrowed funds, and don't generally apply to businesses or certain other larger amounts, specified by the lender. Some lenders, however, will give unsecured loans with the unsecured personal loan interest rate to homeowners, provided that they meet the requirements they set forth. As a general rule, those with bad credit wouldn't even need to bother checking out percentages, but there actually are lenders who feel that those with bad credit deserve a second chance and will give them lending without collateral as well. The percentage can be a lifesaver to those people as long as better financial practices are developed and timely payment made. If they follow those guidelines they will be on the road to better credit. The unsecured personal loan interest rate can be an expedient resource with God's help. Borrowers should always trust in Him to lead them to the right decision. "It is better to trust in the LORD than to put confidence in princes" (Psalm 118:9).

Unsecured personal loans with bad credit provide financial assistance to a consumer with poor financial history without the need for security or collateral to back up the agreement. These can be difficult to find, and the reason for this is that the lender is taking a huge risk offering money to an individual with a negative record. Consequently, if a person can find financing for an unsecured personal loan with bad credit, the terms of the agreement are going to be significantly different from loans offered to people with a strong credit history. If someone is in a position of wanting or needing an unsecured personal loan with bad credit, they should seek personal answers to a few hard questions. Most importantly, the individual must determine if the money is necessary and immediately needed.

Sometimes money is easy to find. In many cases, such as for a new business or a new car, this is a benefit. However, to people with poor discipline and poor financial history, this "easy" money is often extended through unsecured personal loans with bad credit. This is never a wise financial move, because more often than not the terms of the unsecured personal loan with bad credit make it almost impossible to pay off the obligation in a short length of time. This means the person who agreed to this assistance is paying exorbitant fees and interest rates. Often unsecured personal loans with bad credit are taken out for things that decrease rather than increase in value, such as for cars or expensive toys. This means the item being purchased is more than likely going to need to be replaced before the entire amount is paid off and the borrower is left with this choice they made that will continue to affect their financial record.

This type of agreement should be the last resort for an individual. First, an individual should decide if they absolutely need an item right now. If not, they should save their cash instead of choosing to sign an unsecured personal loan with bad credit. This way, the individual will be able to enjoy the item without the stress of repayment hanging over their head, and equally as important, they will not be paying more for the item, through interest and fees tacked on to unsecured personal loans with bad credit, than the item is worth. Ultimately, an individual needs to manage his or her finances so that even if the money is available, it does not mean it is a wise decision to borrow it. "All things are lawful for me, but all things are not expedient: all things are lawful for me, but all things edify not." (1 Corinthians 10:23)







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