Loans are something that almost every person takes at least once in their lifetime. They offer you a way to fulfil your dreams of owning a house, a car or anything. At the same time when you are going through a financial crisis and have an emergency for which you do not have the cash in hand and there are no banks or institutions that provide loan for such emergencies then you can opt for unsecured consumer loans. These are also called personal loans in simple terms.
An unsecured loan is lent by a lender without any collateral. They take the credit score of the individual and the type of income that the applicant has. If the borrower has substantial income and a good credit score then he will be able to secure a loan very fast. But in case the credit score is bad and the applicant has a sizable income then there might be a few questions but the applicant can get the loan but it will be approved with a slightly higher rate of interest. Combating financial blues is easy with unsecured loans.
Financial blues associated with Unsecured loans
Any aspect related to budgeting and managing finances taxes the brain of the person. Be it financial planning of a family or a company, the whole process needs to be planned very carefully so that the level of risk comes down. And when a person opts for loans to get through an emergency situation it starts to feel like a burden. Loan taken while buying a car or a house is something that is a planned and well thought of responsibility one prepares himself to take. But unsecured or personal loans do not come into that category and add stress to an already stressful period.
Emergencies come unannounced and when you have to take a personal loan for solving it and the borrower has a bad credit score, he can have his family member or friend co-sign the loan to get it approved faster and at a reasonable interest rate. This will help the borrower to get the loan approved sooner and it will ease him the burden of the extra rate of interest. It is always a good practise to repay the loan instalments on time and this will help improve the credit score. Any bad remark on the credit score takes 12 months of correct repayments and maintenance of the same to look normal.
But it is very important for the co-applicant to be aware that in case the borrower defaults, he will be liable to the lender. This point should be noted by the borrower as well and he should actively pay back the instalments.