you are a homeowner who does not want to pledge his house as
collateral due to the fear of being repossessed or a tenant
who does not have anything to offer as collateral then, in that
case, cheapest unsecured
loans could be an excellent choice for you if you are in
search of low cost loans. Through cheapest unsecured loans you
can get a higher amount of money at lower rate of interest.
unsecured loans, as the name
suggests, are unsecured loans which come at a low rate of interest.
It might sound unbelievable to you, but in reality there are
unsecured loans which are available on an interest rate which,
can compete with the interest rates of secured loans. You just
need to explore the lending market and if you have a good credit
score then, there is no reason why you cannot get a cheap unsecured
loan. Not only this, cheapest unsecured loans do not have any
lengthy documentation process and therefore, are approved very
unsecured loans can be availed to serve various purposes
like to pay off your high interest credit card bills, to refurnish
your home, to pay college fees of your child or to buy a piece
of land. Whatever, be the use, you can always take unsecured
loans and meet them with comfort. Moreover, cheapest unsecured
loans can be availed by salaried people, businessman, and retired
people. These loans can also by people who have low credit score
due to missed payments, default, Bankruptcy etc.
But you cannot get a
low cost unsecured loan by merely applying for an unsecured
loan with a lender. To avail cheapest unsecured loan, you need
to know your needs first, then you need to understand the unsecured
loan market, then you need to find out some of the cheapest
unsecured loans deal and then only you can apply and avail
a cheap unsecured loan. Lets look at each of the steps in detail:
• The first step
is to understand your needs. It is of paramount importance to
find out whether you actually need a loan or not and if yes,
then of how much value. If you need a loan to renovate your
home, then see whether your home actually needs a repair now
or you can postpone it for sometime. On the other hand if you
have huge credit card bills to pay, then you should immediately
take an unsecured loan to clear your credit card debts.
Now you need to know the amount of money you need to take as
loan. The best way to
ascertain the amount of loan you can take is to note down your
two months income and expenses. Experts recommend that your
total outgoings for loans should be around 10 to 15 per cent
of your monthly income. So, if you are earning $3,000 every
month your monthly installments of different loans should be
around $300 to $ 450.
• To avail cheapest
unsecured loans you need to first understand the lending market.
The lending market is very competitive especially, the unsecured
one. Everyday you will find a new lender in the market and every
week scores of new attractive unsecured loan packages are announced.
These lenders compete against each other to get every new deal.
To bring new customer to its fold, these lenders reduce the
rate of interest, to the lowest possible extent. Some lenders
go to an extent of waiving off the processing fees and other
charges. Some lenders try to attract borrowers by giving them
flexible repayment options including payment holidays.
• The nest step
is to search for the cheapest
unsecured loans but before that you should review your
credit history. Your credit history is an important factor which
the lenders review before approving your loan. Not only this,
the rate of interest at which you are sanctioned a loan also
depends on your credit score. Therefore, reviewing your credit
score is of paramount importance. You can obtain a copy of your
credit history from any credit agency operating in your area.
By making a simple application, you can get a copy of your credit
score. Check to find out whether all the information provided
in it stands true. If you find any inaccuracy, promptly report
it to the credit agency and get it corrected. Once your credit
history gets corrected, get in touch with lenders. You can do
this either by meeting their representatives or by simply visiting
their official websites. Collect information on the rate of
interest, loan period, documents needed and terms and conditions
of the loan. Once, you have 6 to 7 loan offers in hand; compare
them against their annual percentage rate.
• Once you have
found a deal as per your requirements, contact the lender and
negotiate to reduce the interest rate. If he agrees, then finalize
the deal by filling up the application form. You can also make
an online application by visiting their website and filling
up a short application form. While you fill-up an online form
always ensure that you give your contact numbers as well as
correct postal address of your home. Also get a print of the
online application form. Once your application is processed,
the lender will get in touch with you and will complete the
rest of the formalities. Soon, a sanction letter of a cheapest
unsecured loan will reach you.
1. Never disclose personal
confidential information either on phone or via E-mail, fax
2. Do not jump on the
first offer you find attractive. You can surely manage a few
days without a loan.
3. Discuss the loan matters
with your family members. They have a stake in your life therefore;
discussing it with them will only help you manage your finances
4. Talk to somebody whether
a friend or a relative who has taken unsecured loans. He will
definitely share his experiences which will guide you well.
5. Seek professional
help if necessary. Even though they come at a price but if they
can help you get a loan at lower rate it is good for you. Even
a slight reduction in rate of interests can save hundreds of
6. Always remember that,
an unsecured loan is a long time financial commitment. Therefore,
whatever loan offer you select, you should be clear in mind
about every aspect of it.
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