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How to Find the Cheapest Unsecured Loans

How to Find the Cheapest Unsecured Loans

When you need to get a lot of money in a hurry for any of life’s unexpected needs, finding the cheapest unsecured loans becomes a priority.  An unsecured loan allows you to borrow money without any collateral.  Unlike a car loan or a home loan, where the object you are borrowing money to purchase can be repossessed if you fail to make your payments, unsecured loans are a big risk for lenders due to the fact that there is no object of value they can repossess and sell if you default on your loan.  Thus finding the cheapest unsecured loans can be a challenge, and these loans may not be available to everyone.

The cheapest unsecured loans carry low interest rates that allow borrowers to pay them back more easily.  The cost of the loan itself becomes lower when the interest late is lower; thus a cheap unsecured loan will cost you less overall.  Unfortunately, in order to qualify for the best interest rates, you will need to have a very good credit score.  Most lenders will not offer unsecured loans at all to people with poor credit; the combination of a spotty credit history with the unsecured status makes for a very bad risk.  Thus truly cheap unsecured loans are almost always reserved for those with good credit.

If you have some problems in your credit history that are preventing you from applying for the cheapest unsecured loans, the best thing to do is to spend some time cleaning up your credit before you apply.  This will improve your chances of being approved.  If you can build your credit through other means and make sure to pay all of your bills on time, you will vastly improve your odds of getting the cheapest unsecured loans.

Once you have a good credit score, finding cheap unsecured loans can still be a challenge.  In the current economy, banks and other financial institutions are wary of lending out money in the absences of collateral.  In a financial climate where even people with decent credit can have trouble qualifying for home and car loans, which are secured loans, it is even harder to qualify for cheap unsecured loans.  There are a few ways to go about finding them, however.

A good place to start is with a financial institution where you already have a history.  The bank where you have had a checking or savings account for a long time, or a place where you have already had a loan such as a mortgage or car loan is a good place to start.  Because you have already proven yourself to the bank as a credit-worthy person who pays bills on time regularly, you will be more likely to be considered favorably for a cheap unsecured loan.  Pay a visit to your local branch if you can and ask to sit down with a loan officer.  A face to face meeting is often more effective when it comes to being approved for a loan than speaking to someone over the phone who is in a call center somewhere.

Another source for the cheapest unsecured loans are the financial institutions who deal regularly with this sort of transaction.  Because they do a lot of work in this area, you will find that they are more experienced in figuring out how to get you approved for the money you need.  Many of these are large financial companies that do not have local offices, and you will have to deal with them over the phone.

Finding the cheapest unsecured loans will require some legwork on your part.  You will probably need to make a lot of phone calls and ask around in order to get the best deals.  Financial institutions don’t general come to you offering cheap unsecured loans; you will have to seek them out and provide as much evidence of your credit-worthiness as possible.  The good news is that if you do take the time to ensure your credit is in order and you can show a good history of taking care of your bills, you are likely to qualify for a cheap unsecured loan to help you take care of just about any needs you may have.

Photo courtesy of AMagill.

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