Tag Archives: borrower
Unsecured Loans – finance for everybody
As the name implies, unsecured loans don’t require the borrower to pledge any of his assets like home as security against the loan amount borrowed. Instead, the loan is granted viewing the borrower’s credit history and his ability to repay the loan. These loans are also called signature loans or consumer loans. Unsecured loans are multiple loans that can be used for a plethora of purposes. Some of these are mentioned below
The following are the parameters on the basis of which a lender grants unsecured personal loans to the customers.
The credit history of the borrower – This is the most important criterion for judging a borrower. If the borrower has a number of defaults, arrears and miss payments in his credit history, his chances of securing an unsecured personal loan are low. He may, though, get a bad credit unsecured loan at high interest rate. If the credit score of the borrower is above 700 on the scale of 800, he may get an unsecured more comfortably because of his excellent credit record.
The DTI ratio of the borrower – DTI i.e. Debt to consolidation ratio reflects the affordability of the borrower. DTI = Debts/ Income of the borrower. If the DTI is greater than 3.6, the borrower has good chances of getting an unsecured loan.
So, the above cited reasons are the two most important factors that contribute in the lender’s decision in respect to the loan amount, loan tenure and APR to be charged. If the credit history of the borrower is bad but the DTI ratio is good, the borrower may get an unsecured loan. Better the credit score of the borrower, lower his annual percentage rate (APR).
The amount one can borrow as unsecured loans start from as little as £500 and can go up to £25,000. Because the borrower doesn’t secure the money by any collateral, lenders tend to limit the value of unsecured loans to £25,000. The repayment period may stretch from six months to 10 years.
Payday loans- loans for you when the financial need is urgent
Need financial help in the middle of the month? In such situations, one can opt for payday loans. These are short term loans offered to people for their small fiscal needs.
These loans can cater to many needs including, paying off an unexpected medical bill, travel expenses, grocery bills, rent, education expenses or outstanding debts.
In order to qualify for these loans, there are some requirements to be fulfilled by the borrower which are:
1. The borrower must be at least 18 years of age, 2. He/she shall have a valid, current bank account capable of direct deposit, 3. He/she shall be employed for at least past 6 months, 4. He/she must have a salary of at least £100 per month.
Once, the borrower qualifies for loans, he can fill an application form, in which, he/she needs to provide some of the personal details such as, bank account number and employment details.
The amount which can be extracted from payday loans ranges from £1000 to £1500 and the repayment term varies from 2 to 4 weeks. The repayment of these loans is convenient. The interest rates can be a little high as these are short term loans.
People having bad credit problems like arrears, county court judgments, IVA, late payments, defaults, etc can freely avail these loans. There is no credit check involved in these loans. Hence, the procedure of approval of the loan is quick. Bad creditors are offered loans at slightly high rate of interest because such people hold a bad credit history.
One can apply for these loans by visiting a financial institution personally or by filing a simple online application. The latter option is quick and easy. After one has filled the online application form, the application gets approved and the grants are transferred into ones bank account directly, within 24 hours.
Payday loans have been made very easy to avail nowadays as, online application is here. These loans are ideal for fulfilling urgent fiscal needs.