Unsecured Car Loan - Small Finance for Owning the Vehicle

By: Pamella Scott

Often, it is only smaller amount of loan that we need for buying a car, especially if it is not highly priced. Through , you can borrow smaller amounts, without any risks. However, you must ensure that the loan is not a repayment burden on your limited finances.

You do not have to pledge anything, not even the car you are buying, for collateral. This means that the borrowed amount is fully free of risks. The only damage you will be doing to your self is to lower your credit rating in case you make late payments or default on the payments. In the absence of collateral, these loans are approved only when the borrower has proved his or her repayment capability through documents of income and employment. Another aspect that you must keep in mind is that your credit rating should be acceptable to the lenders.

Get copies of your credit report to check that there are no errors in it. If your rating on FICO-scale has fallen, then ensure that you apply for the loan after making timely payments towards old debts. Apply for the loan when the rating has improved.

Unsecured car loan can provide you up ?5000 to ?25000. You can repay the loan in 5 to 15 years. However, absence of collateral results in the lenders promptly charging interest at slightly higher rate. Usually these loans are approved at fixed rate of interest, allowing you to know your monthly repayments beforehand.

A history of arrears, defaults, late payments and CCJs means that such a borrower will be approved the loan at enhanced rate of interest. However, a lower rate is possible once the borrower has made a sizable down payment to the lender. The down payment gives a sense of security to the lender. Hence, bad credit borrowers can use the down payment for ensuring approval of the loan.

Make sure that you have made an extensive search for unsecured car loan to find out a suitable deal for your circumstances. Repay the loan on time.

Unsecured Loans
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Unsecured Loans