There is nothing intrinsically wrong in seeking unsecured loans for anyone who will lend you the money but financial institutions like to see that the people to whom they lend money has a record to pay their debts. And that credit history or assets you have will be used as collateral for you to pay your debts or at least have assets that compensate the financial institution for the risks it is running.
First of all, think about the interest
But there are things you can do to start building healthy credit, which will not hurt your finances dramatically. The first of these is to be aware that interest on unsecured loans is always higher than interest on loans and regular loans. This is because the financial institution is taking more risk by lending you money. You must be thinking that it even looks like consigned loan. Only the payroll loan has the guarantee of your salary, taking it out of our article.
Bottom line: unsecured loan should be one of your last options to get money in the financial market as it will always be expensive and may even outweigh credit interest.
Therefore, the options below, in addition to explaining how you should get the unsecured loan, will help you find other options for credit easier, but without the weight of interest on unsecured loans.
Your ability to repay a loan should be analyzed before you go out looking for an unsecured loan. Bottom line: do not take a loan without knowing you can afford it! (Photo: aplustitlepaydayloan.com)
What will be the use of the loan?
Who gets to the point of needing an unsecured loan is in one or more of these situations: desperation to pay debts, want to clear the name in the SPC / SERASA, can not prove income or needs extra capital for some purpose. Of all these options, the latter is a type of loan from which you must run at any cost as it will only result in a debt that you could have avoided.
Review what made you need the loan
You should analyze what caused you to go into debt and need a loan. Have you spent too much on credit cards? Used a loan and could not afford it? Did you have a medical emergency in your family? You should analyze these causes and try to avoid them in the future, understanding how to avoid them. Perhaps, just in this analysis, you already discover that you are able to pay your debts without needing a loan.
Assess your ability to repay debt or loan installments
Having analyzed the causes of debt, you should see how much money you have per month of earnings and where has gone this money to find out where you can cut costs. Then if even with the cost cut you are not able to pay off your debts through a installment that corresponds to the amount you can save / cut, think of a loan that has installments within the amount you could save / cut.
If you can not get a loan on these criteria, you should seriously consider finding a part-time job or a second source of income, at least to afford the extra costs of a loan or installment payment. It does not have to be a permanent job, but you can use enough time to pay your bills. Maybe this job even gives you access to a lower rate loan if you have proof of income through it or a low interest payday loan (when you do not have the dirty name).
Negotiate your debts directly with the creditors
Maybe they pawn the debts with less interest than the unsecured loan. Just make a call, and you will have access to trading. But be sure to make a contract for the repayment of debt as this will ensure that your lender accepts the payments and does not act with bad intentions over the discharge.
If it is not possible to negotiate installments, try reducing the amount of debt before getting the loan. The less you need, the better.
Getting an Unsecured Loan
To get an unsecured loan, after doing the financial planning, evaluate how much loan you will need, ie the EXACT amount of money to repay your debt and you go on to pay the installments of the loan. You’ll be tempted to take out a bigger loan because of small amounts. Resist this temptation and save hundreds of dollars in interest.
Knowing the right amount you need, try to take this loan with family members, who can borrow money without interest or with very low interest. You may not be able to get the entire loan, but you can cut enough to not afford expensive interest for a long time.
Then you should try to clear your name as much as possible, cutting unnecessary debts like entertainment and luxury (like eating out) and trying to run a checking account at a public bank that has lower loan rates.
If you can get the account at the public bank, you will not even need the unsecured loan. If you can not, you will need to find several financial institutions that offer this type of loan to have a margin of negotiation with them, either to get a larger loan amount or more affordable interest rates. The negotiation should be tough, well researched, and the longest and longest lasting part of your borrowing.
Avoiding unsecured loan should be a financial rule for anyone. Paying interest, except for rare cases (buying a property or investing in a personal business), is always a guaranteed and disadvantageous loss. Think and analyze well whether the loan is really a necessity or a luxury. Evaluate the causes that led you to need this expensive loan and how to avoid, in the near future, the demand for this type of financial market product.
Have you obtained an unsecured loan? How did you get this loan? Was it difficult to pay or negotiate more affordable interest rates?