Unsecured Loans

Unsecured Loans for Borrowers Wanting Same Day Finance

When it comes to qualifying for a loan, or any form of credit for that matter, your credit history is your most valuable asset. It dictates the type of loan you can obtain, the amount of that loan, and the terms under which that loan will be administered. Your credit history will also determine who you can expect to authorise your loan.

Traditional lenders are generally hesitant to back loans for borrowers with poor credit. In an effort to minimise their risk they target their lending products to consumers with above average credit scores. Unfortunately, that can leave millions of UK residents in a tight spot. Even if your income is steady and your debts are under control you may find it difficult to obtain the loan you need from a conventional lender.

This is particularly true when it comes to qualifying for an unsecured loan. But consumers with poor credit histories aren’t entirely out of options. Alternative lenders can often match borrowers with the unsecured loans they need in spite of their less than perfect credit rating.

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Representative Example: Rates from 48.1% APR to 1721% APR. The minimum Loan Term is 1 month. The maximum Loan Term is 36 months. Representative Example: £1,000 borrowed for 18 months. Monthly Repayment of £89.22. The total amount repayable is £1605.96. Interest amounts to £605.96, an annual interest rate of 59.97% (fixed). Representative APR: 79.5% (variable).

What Exactly is an Unsecured Loan?

There are three basic categories of lending products designed to serve borrowers with bad credit. They are secured loans, guarantor loans and unsecured loans. Secured loans require the borrower to pledge assets of equal or greater value than their loan in order to minimise the risk to the lender. In the event the borrower defaults on the loan the lender has the right to seize the pledged assets to cover the loss.

Guarantor loans require the borrower to engage a co-signer, or guarantor, to share responsibility for the loan. If the borrower fails to maintain the payments on their loan, or defaults on the loan entirely, the guarantor assumes the debt. In this situation the co-signer pledges to pay off the total cost of the loan, including all interest and fees, should the primary borrower fail to meet their obligations.

Unsecured loans do not require the borrower to pledge any assets to engage co-signers to guarantee the loan. Unsecured loans tend to involve smaller sums of money and often feature strict and highly structured repayment terms. This is particularly true when the loans are being offered to a customer with a less than perfect credit score.

What Can You do with an Unsecured Loan?

Unlike some conventional lending products, same day loans come without any spending restrictions. The money you receive from an unsecured loan can be spent in any way you like, barring anything illegal of course.

The most common uses of an unsecured loan include:

• Debt Consolidation
• Home improvements
• Car repairs
• Tuition costs and school fees
• Medical bills
• Relocation costs
• Rent/mortgage payments

How Your Credit Score Impacts Your Lending Options

In the UK there are three primary Credit Reporting Agencies (CRA), each with its own proprietary rating system. While the rating systems may differ they share one common factor. The lower the score the more problematical the credit score.
The CRA ratings break down as follows:

• TransUnion – 0-710
• Equifax – 0-700
• Experian – 0-999

Your credit history is a virtual snapshot of your financial past. Credit reporting agencies keep track of your credit card use, your borrowing patterns and, above all else, your record of paying your bills on time and in full.

A variety of factors can adversely impact your credit score, including:

• A history of late payments.
• Defaulting on loans or legal debts.
• Excessive cash advances.
• A pattern of applying for, and being denied, credit.
• A history of County Court Judgements.
• A history of bankruptcies.

Your credit history plays a large part in determining your eligibility for a loan or line of credit. It will also impact your choice of lending products as well as the amount of money you may be able to borrow. The better your score the more options you will have.

Unsecured Loans for People with Bad Credit

Any reputable lender will consider your credit score when your apply for a loan or line of credit. If your credit score is poor most conventional lenders will classify you as a high risk customer and, in most cases, refuse the loan. As an alternative lender we take a different, and more personal, approach.

At Pounds to Pocket, our lenders don’t only look at your credit rating. They also consider your real life financial situation. They look at your your current income vs expenditure and your outstanding debts to help evaluate your eligibility for a short-term unsecured loan. Our main concern is that you have the financial stability to keep up with your loan’s repayment schedule and the resources to discharge that loan on time and in full.

Of course, that doesn’t mean that we aren’t interested in your credit history. When you apply for a quick loan from Pounds to Pocket our lenders will initially perform a soft credit check. This won’t show up in your credit history and will not have an impact on your current credit score. After we’ve collected all of your personal information we will make a decision regarding your loan. When you are approved for the loan you will receive an offer which you are at liberty to accept or refuse.

If you accept the offer the lender you have been matched with will perform a second credit check. This will be a hard check that will show up in your credit history and will be reflected in your credit score. However, at this point your loan has already been authorised. The second credit check is merely a formality that is necessary to complete the loan process so we can release the approved funds to your designated bank account.

How to Apply for an Unsecured Loan

At Pounds to Pocket we make applying for an unsecured loan as quick and easy as possible. Your application can be completed entirely online. Simply state the amount of money you wish to borrow and then fill out the application form to get the process started.
Naturally, we have some basic requirements that all applicants must be to be considered for any of lending products. In order to qualify for an unsecured loan your must provide the following information:

• 18 Years or Older
• UK Resident
• Income from employment or benefits.
• UK home address, phone number and email address.

We will also need you to submit your current contact information (e-mail, telephone, etc). We always recommend that applicants double check their information before submitting their loan request. Any inaccuracies can lead to a delay in your loan request being approved or, in some cases, a denial.

When your loan is approved we will contact you directly with an offer. If you accept the funds you requested will be deposited directly into your account. In most cases, the funds will be available within 24 hours.

Improve Your Credit Score by Successfully Managing Your Loan

Unsecured loans do more than just provide the funds you need when you need them. They also give you the opportunity to improve your credit score and rehabilitate your credit history. Every on-time payment counts in your favour and credit reporting agencies will take notice. When you successfully pay back your loan it will add much-needed to points to your credit score giving you greater borrowing power in the future.

If you would like to learn more about managing your finances the following UK government resources are available for free to all UK residents:

• Money Helper
• Step Change
• The National Debt Line