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Types of Small Unsecured Loans

Different Types of Small Unsecured Loans Options to Evaluate

Do you need more money to pay off your existing debts? Then you can opt for small unsecured loans, by which you can pay some of the money you owe. This article talks about the major types, as well as some advantages of such loans.
Madhurjya Bhattacharyya
Last Updated: Apr 9, 2018
You can use a small unsecured loan for a variety of purposes, but usually most people go for it to deal with an immediate financial crisis. If you have an excellent credit score, your loan may be easily approved by any bank or financial institution. On the other hand, if you have a bad score, there are chances that your application will be rejected. However, there are some alternatives which you can certainly try out. There are lenders who give you money, even if you have bad ratings, and there is no credit check. But you will have to pay a higher rate of interest, although, it's better than not getting a loan to meet your financial emergencies. Few types of these loans have been described below.

Loans for Bad Credit

If you are looking for a money provision which neither requires a collateral, nor a credit check, you can go for these small unsecured loans for people with bad credit. They are helpful to those who live on rent and do not own a home. Also, you don't need to pay any security deposit. Lenders who provide these loans, actually help the customers, who have been refused by traditional banks. The problem for lenders is that they don't have your credit score to judge your creditworthiness, which results in charging a flat rate of interest by them. This rate accrues quickly, so you need to repay them as soon as possible, or else you will be in further debt.

Personal Loans

If you want to improve your track record of making payments, you can go for personal loans with no credit check. However, you need to make sure that you follow a fixed budget every month. You might have to opt for them, after you have exhausted all other options. The amount you have withdrawn from your credit card may have reached its limit, and there may not be any other options left. It's very much possible to obtain funds from these loans, so as to pay all your bills and debts. If you are opting for this loan, you need to take into consideration, whether you will be able to pay off the amount within the specified time period. Never take a loan, which you are not absolutely sure of paying off, by the due date. If you are able to make your payments on time, your credit score will improve, and you will be able to apply for a bigger one, with a lesser rate of interest.

Business Loans

If you are looking for a small business loan, you can opt for its unsecured type. Usually a business loan requires a collateral, but this type does not require it, although, you would need a good financial credit history. In case your business does not have a good history, you can consider a cash advance. The main advantage of this loan is that, it gives you the option of flexible repayment, besides not requiring a collateral.

Debt Consolidation Loans

If you are struggling with a number of debts at the same time, and are unable to manage them, you can opt for this loan. This will enable you to pay off all your debts, with the money you receive. The main advantage is that, you can save a lot of money in this way, if you calculate the amount you would have to pay in the long run.

So, if you have this recurrent problem of paying off bills every month, and you can't afford the amount, go for these small unsecured loans, to pay off your debts, once and for all. You will also have an excellent opportunity to improve your credit ratings in the long run.