Unsecured loans and your credit rating

An unsecured loan is given to you without you offering up security or collateral which can be taken over by the lender in the event of you being unable to repay the loan.

Larger unsecured loans can be difficult to get if you have a very bad credit rating. At a minimum your interest or repayment terms can be affected if your credit rating isn’t great.

Nonetheless, an unsecured loan has many pluses if credit rating is perfect or quite good. Firstly your personal belongings or assets are not at risk in the event of default.

If you default on an unsecured loan, your credit rating will suffer and it will be hard to get credit thereafter. Your credit rating might be affected for up to seven years when a default is listed.

Small, unsecured loan like the Cash Doctors ones I recommend are easier to get. Because of the small size there is much less risk to the lender. Other checks are done, so the lender is not entirely dependent on your credit rating to make a decision.

If you are in the market for an unsecured loan you should definitely go for one of the three options I’ve investigated. Why repeat all my hard work?

Think about how much you really need to borrow. Then apply for the Cash Doctors, Aussie or GE loan, depending on your situation. Try not to take more than you need.

• A few hundred dollars for a short period
  
  
• Several thousand dollars for a purchase
  
  
• Several thousand dollars to streamline your financial situation and consolidate you debts