When money is tight, unsecured installment loans might just be the answer for cash-strapped consumers with bad payment histories. Consumers with low credit scores can have difficulty getting financed for a home, car, or to pay off delinquent debts, because prime lenders won’t touch them with a ten-foot pole.
Unsecured installment loans provide financing without collateral or good credit. And when lenders make it easy to obtain financing without the usual criteria, consumers are provided a much needed second chance to get back on the right road to financial stability.
Finance companies offer high-risk borrowers redemption from bad credit, but there is a price to be paid. What some would term as exorbitant interest provides a measure of compensation for lenders willing to gamble on consumers with bad payment histories.
Borrowers can also benefit by unsecured financing to buy some time to clean up credit reports and boost scores. Some consumers are just a few thousand dollars away from reestablishing good creditworthiness; and bills that have lingered year after year because of an inability to amass sufficient funds can disappear overnight.
Second chance financing can erase debts incurred as a result of chronic illness, accidents, divorce, or job losses, which can happen to anyone at any time. Layoffs and job loss due to business closures, unexpected medical bills, or even the death of a spouse can wreak havoc with a family’s finances and plunge them into despair.
But unsecured installment loans can mean the difference between surviving or succumbing to a financial catastrophe. Borrowers seeking debt relief can apply for financing online or through a local company.
Most agencies will ask for proof of employment, banking information, and personal details, such as a listing of major creditors and outstanding account balances. Consumers can browse online sites to compare rates and find information on qualifying requirements.
High-risk borrowers must be at least 18 years of age, currently have a steady income of a minimum dollar amount each month, and have a checking or savings for direct deposit of electronic funds. An established bank account also enables monthly payments for unsecured installment loans to be automatically withdrawn from the borrower’s account on each due date.
The application and pre-approval process for obtaining unsecured installment loans online is usually faster than applying at a local company. Most neighboring agencies require filling out mounds of paperwork and waiting days before approving applications, but Internet lenders may process paperwork a lot faster, approving loans within minutes.
Using the borrower’s personal financial data, web-based lenders can get lightning fast results and issue electronic funds, usually within the next business day. Electronic payment can be directly deposited into borrowers’ bank accounts or securely mailed to recipients. Consistent payment of installments via the Internet also provides an ironclad record of a high-risk borrower’s effort to faithfully repay debts.
These types of collateral-free unsecured loans can help bail out consumers with serious money problems, restore creditworthiness, and eventually help them qualify for prime lending rates. While no one likes borrowing money, especially with high interest, unsecured installment loans could be a consumer’s only way to get out of debt and obtain redemption from past financial mistakes.
Lenders who provide unsecured loans are taking a gamble on consumers with poor payment histories; but the finance charges add cash to their coffers. In addition, lenders who give high-risk borrowers a second chance and a helping hand indirectly boost a national economy which depends largely on consumerism.
Freeing customers from the burden of overwhelming debt enables them to spend more money on goods and services; and that cash or credit helps to stimulate the economy. Borrowers who succeed in reestablishing creditworthiness via unsecured installment loans may be less likely to incur personal or business indebtedness in the future.
By carefully weighing repayment options and terms, debtors can get free from crushing debt and realize financial freedom.
Jack R. Landry has a PHD in financial services and has written hundreds of articles relating to consumer services and check cash advance. He has been a consumer advocate for
nearly 25 years.
Jack R. Landry