It happens to most of us, especially now with the increasing value of goods and services around us… running out of money just before pay day arrives. It may seem okay to some, toughing it out with only a few days left until your next pay check but then, you open your fridge and see you barely have enough food and drinks to get you through the next couple of days. It’s easy! Just call up your mum, your sister, or knock on your next door neighbour for a simple favour, right? But then, just as soon as you get to your apartment, your landlord knocks on your door asking for the rent you owe and have been trying to avoid for a week now. What do you do then? Where or who do you turn to next? You turn to no one but yourself! The solution? Get unsecured bad credit loans, of course!
The term “unsecured” may put you off and make you think that you’re getting loans which aren’t, well… secured on your end. But don’t take it as literally as its name. Unsecured simply means that you don’t need to put up any collateral for your loan. In general, usual loans with big amounts are taken out against the borrower’s’ property. But this cannot always be the case because not all people have properties to their name. Because of the rise in apartment rentals, unsecured loans can be obtained by people who doesn’t have any property collaterals to give.
Usually, the basis for unsecured loan applications are the borrower’s credit standings but unfortunately, not all borrowers have good credit scores. But don’t stop reading! You could actually do something about that so that you could still apply for a loan.
Credit Scoring: The Good and The Bad
Individuals, most especially those in the workforce, eventually gain and build their credit scores. People don’t immediately get a good credit score off the bat. This may be a reason why it can be hard to apply for credit – whether on loan or credit cards. You get a bad credit score if you miss out on payments on your loans, credit card bills, and debt repayments or maybe at one point in your life, you actually declare yourself as bankrupt. However, sometimes, this may be out of our hands.
Did you know that you get a bad credit rating if you actually don’t build a credit profile? Don’t worry though, because you can easily improve your credit score but it would take some time by paying off bills on time and by paying loan and debt repayments promptly. There’s no need to hurry, because you can still actually apply for loans when you need it even with a bad credit score.
Cashing Out with A Bad Credit Score
You don’t have to worry about the no money before pay day comes peril anymore because you could actually secure some quick cash by applying for unsecured bad credit loans. The whole process for this doesn’t take too long because you don’t need to surrender any property as collateral and at the same time, you don’t have to prove and improve on your credit score. How does it work exactly? With these types of loans, borrower’s will be assigned guarantors to pay the loan for you.
Your guarantor is someone who trusts you enough to apply a loan in your name but with his good credit standing or his property title as collateral. You would be the one who would still make the loan repayment to loan companies, but an agreement between you, the loan company and guarantor would be made should it reaches a point where you can no longer pay for the loan. When this happens, the burden of completing your loan repayments would go to your guarantor. But why would you skip out on a perfectly good opportunity to improve your credit rating?
Unsecured bad credit loans are easy to help you get back on your feet when you need it financially. As long as you have someone you trust and they trust you back in the same way, you could easily get small amount loans to help you get by. It’s actually also a good way to slowly improve and build a good credit score as well when you promptly pay your loan repayments. However, it’s not the type of loan you’d like to re-apply for again and again in the future just to get quick cash. It is a stepping stone to bigger chances of applying to bigger loans which someday could be secured. But in the meantime, who knew unsecured loans and bad credit could go hand in hand in one sentence and actually be of great help to you.