Money Money Money

What is a High Risk Unsecured Personal Loan: A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient is called an unsecured loan. No property, interest or security is used as collateral in either a guarantee or a pledge. It is called high risk because unsecured transactions are the most risky for the lending or selling party and least risky for the borrowing or buying party. Lenders or sellers are provided no compensation for default of payment or failed delivery of goods or services.

With this type of loan, you are not risking any of your personal property. The only thing that you are giving the lender is your signature. This loan is called a signature loan or an unsecured credit line. The lender is greatly at risk with this type of loan and the interest rate you will pay can be very high. In most cases, you are better to give the lender something as collateral. Be prepared to pay 10-40% interest or higher depending on which State you live in and in what kind of credit situation you are in.

Get a break down or schedule from the lender of what exactly the loan will cost you over the term of the agreement. If the lender has to give your file to a collections agency, most of these agencies charge 30% of what they collect. If they take you to small claims court, there is a fee and time for the lender to do this as well. Lenders manage their risk very well. Have a copy of your credit score and be prepared to explain yourself to the company you are working with for financing.

High interest loans are recommended only if you know you can get out of them quickly. High interest payments will set you back faster than anything else and make your credit worse in the future.

Why Do You Need a High Risk Unsecured Personal Loan: Money money money…! It’s not always funny! While you can have all the fun of the world with it at times money can land you in abysmal distress if you are not careful dealing with it. There is no end to the needs that you need money for. When someone said necessity is the mother of invention it was not probably felt in what proportions human needs could grow. It was not also probably visualized in what huge magnitude rarities would convert into luxuries and luxuries would convert into necessities. Less than twenty years back a cell phone was a rarity that very soon became a luxury with exorbitant costs even to answer a call and now in some countries the number of cell phones exceed the total population!

So you need money as much as we all do. And the consumerist market gives you ample ways of utilizing money. If your pay packet does not suffice they give you credit cards in any number you want. They give you huge credit limits that hardly compare with your salary or monthly income. They want you to overspend knowing fully well that you will gleefully oblige. So that they can give you an array of personal loans with discounted flat rates of interest or interest with reducing balances. You need these loans to clear off growing credit card balances. With your pay packet compromised to compulsory monthly installments you cannot still be wary of your ‘necessary’ purchases. So cleared credit cards’ balances start growing all over again. You also feel the needs for home and car loans too. You start missing out on mandatory payments. Distress begins. You look for a much bigger loan to take care of all others and finally hit the abyss. Depending on the types of situations you could be in poor bad or near bankruptcy credit rating. All the sunshine offers will evaporate by now.

But the understanding market knows exactly what you want. You want high risk unsecured personal loans as you will have no guarantee to offer and whatever real assets you may or may not be having you will never like to mortgage them at the earliest.

The Options Available: If the market can diligently lead you to a debt trap it has to have the wherewithal to rescue you from the same. Be it the American or European or Asian markets there are scores of financial agencies specializing in the type of financing you want. They do not care what type of credit rating or score you have and some of them are willing to give you $1000 to $10,000 overnight. They also oblige you by negotiating with your creditors to streamline the payment schedule. This is indeed good news for people who really need this.

Only If You Have To: As we have said earlier you should go for high risk unsecured personal loans if you have no other options due to the very high rates of interest charged. You go for it only if you are sure of coming out of it easily and definitely not at the risk of going bankrupt. As a more practical alternative you should concentrate on improving your credit rating by streamlining your repayment schedule, curtailing your instincts for overspending and by trying to make the extra buck through extra work. There is a direct relationship between your credit score and the rate of interest charged on loans. The more the credit score the less is the interest rate.

Make your money work for your benefit only.