Is unsecured loan the best option for people with a bad credit history?

loanThe unsecured loans have started to be popular in the last 7 years, since 2009 the rise in unsecured guarantor loans has significantly grown. People have started to turn to the unsecured guarantor loans since they can have a bad credit history and they don’t need to poses any property on their own, they just need to have a person who can guarantee form them that the loan will be repaid in proper time and that is all. The lenders need to be sure if the borrower is able to repay the loan that was borrowed, therefore lenders need to know a lot personal information about you and your guarantor, since they can only rely on your guarantor that you will repay the loan that you borrowed.

If it comes to a situation in which you are not able to repay the loan that was borrowed than the guarantor is there to help you get back up on your feet and to pay for you if you are not able to repay some part of the loan. The guarantor takes all the obligation over the loan since he is the one that guarantees for the loan that you took, your part in the whole agreement is to repay the loan that was taken, the higher the loan that is borrowed the lower the rates are made for the repayment, for example if you were to take a loan of £ 1000 and you want to repay it in 1 year than the rates will be increasingly high the rate will be 1,30 and for a loan of £ 1000 that needs to be rapid in 12 months , the total repayment is £ 1300 in 1 year, but if the borrowed sum was higher the rates would be lower.

So generally it suits you better to make a larger loan than a smaller one, since you can decide how long the period of repayment is going to be, that is made on the period of making the agreement. Unsecured loans can be made by Banks, Companies and you can decide from whom you want to borrow the loan. The lenders need to be sure if you are capable of repaying the loan that you want to borrow, they need to be sure that you have a stable income and that your salary can cover up the monthly payment that needs to be made in order for the agreement to work.

The unsecured guarantor loan or personal loan is great bad credit loan if you have a bad credit history because it can help you get back on your feet in a short period of time and you don’t have the risk of losing any household property that you own. In this process you are not risking much and you can safely get out of your debt and start over again with the help of your guarantor who is there to back you up in your time of need.