When it comes to unsecured loans for people with bad credit, there are some pre-conceived ideas that are generally accepted. Not only is it thought that such loans are exceptionally difficult to get approval for, it is also believed that the best terms available are extremely bad.
Neither of these is actually true, with unsecured personal loans for bad credit available to those who know how to structure a convincing application. This is because the stigma of bad credit ratings is not very strong at all, while the fact a loan is unsecured only leads to no collateral.
Still, a reliable strategy should be applied when looking to get loans with bad credit approved with no security.
Benefits of an Unsecured Loan
For the most part, unsecured loans for people with bad credit are only risk from the point of view of the lender. This is because, with the absence of any collateral, the borrower has nothing to lose should the loan be defaulted on. The lender is simply unable to recoup their money, and has to write the deal off as a bad debt.
To this end, seeking an unsecured personal loan with bad credit is often a preferred option. But the higher level of risk explains why lenders will usually increase the rate of interest. It is the only way that they can try to protect themselves against the threat of losses, allowing them to recoup a higher percentage of the actual principal lent.
The borrower needs to accept this as being an integral part of the deal, and the price that is paid for not placing any existing valuable items at risk. Getting loans with bad credit approved with no security will cost more in the long run.
Getting Fast Approval
Fast approval on unsecured loans for people with bad credit really comes down to what lender is approached. Traditional lenders, for example, usually take a minimum of 24 hours to make a decision on an application, though it is common to have to wait longer.
In many cases, that kind of time frame is not suitable, but a judgement on an unsecured personal loan has more than one issue to examine. Happily though, online lenders tend to provide faster approvals, with many promising a decision in just one hour.
The reason that is impossible get loans with poor credit approved with no security in such a short time scale is down to the fact that most online lenders ignore credit ratings anyway. This removes the need to check the rating. So all that is needed is some basic criteria to be met for the green light to be given.
Basic Criteria Required
The criteria necessary when applying for unsecured loans for people with poor credit are pretty straight forward, especially when applying to online lenders. Proof of age and proof of citizenship is both standard, with anyone under 18 years old and not a U? Citizen not generally acceptable.
Of course, proof of employment and income is also basic, with all lenders needing to know that the borrower has the ability to repay the loan. However, access to a bank account is also vital for online lenders to grant an unsecured personal loan with poor credit. This is so the loan can be filed into the account, and also so the repayments can be made automatically each month.
Traditional lenders tend to want the same things, but with some extra documentation provided too. This only succeeds in delaying the approval process. Turning to an online lender means getting loans approved with no security much more quickly. Unsecured Loans for People With Bad Credit Can Be Approved Fast