An unsecured loan does not require collateral to be furnished by the borrower. Thus it is most suitable for people who either don t own a home or have adverse credit history. However, absence of collateral makes an unsecured loan a high-risk loan product for the lender. He, therefore, is forced to set strict terms and conditions for the loan. The interest rates are high and the term of repayment short. These disadvantages, for a long time, discouraged numerous borrowers from availing an unsecured loan. It is for such consumers that lenders in UK have come up with cheap unsecured loan.
Cheap unsecured loan, as the term suggests, is cheaper than the usual unsecured loan products available in the loan market UK. Its interest rate is low and some lenders also give the borrower an option to choose a long repayment term so that the monthly instalments don t make a hole in the borrower s pocket.
As far as the use is concerned, a cheap unsecured loan is one of the most flexible loan products available right now. One can use a cheap unsecured loan for a number of purposes like wedding, holiday expenses, home renovation, debt consolidation, medical expenditure, car purchase and shopping.
A cheap unsecured loan can be availed by people with unimpressive credit record as well. However, you will not get such a loan from the prime lenders in UK. The prime lenders usually avoid people who have arrears, defaults, bankruptcy, county court judgements (CCJs) and missed payments against their name. The sub-prime lenders usually grant cheap unsecured loan to such people, but the terms and conditions are stricter than those of a normal unsecured loan.
Before you apply for a cheap unsecured loan, please go through the interest rates of different lenders in UK and make a comparison. This will help you decide which lender to apply to and which loan product to choose. Also, apply online to save your valuable time.
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