Bad Debt Unsecured Loans – Improve Your Credit Score With Financial Loans

An individual with a poor credit score and a number of bad debts to his name, falls in the high risk category for most lenders in the financial market. In situations of sudden financial emergency, such an individual would definitely find it difficult to make alternative arrangements for cash when the need arises. Most financial loans involve long drawn processes with intensive verification process, which would make it difficult for a borrower with poor credit history to secure a loan. The situation gets further worsened, if the potential borrower also does not own any suitable, valuable asset to be placed as security against a loan, to act as guarantee for the loan repayment. However, many lenders in the financial market have realized this financial difficulty faced by many potential borrowers with bad credit and no collaterals, and hence, have introduced the concept of the bad debt unsecured loans.

Any potential borrower with numerous bad debts to his name and a resultant poor credit history can easily apply for and get access to the bad debt unsecured loans without placing any collateral against the loans. It is the borrower himself who acts as a guarantee against the loan and assures repayment to the lender. However, a lender for the bad debt unsecured loans, would like to cushion himself against the potential loss of the principal loan amount and hence, he charges a high rate of interest against these loans. A borrower must be prepared to deal with these interest rates if he is planning to apply for these unsecured loans.

A well planned calculation and substantial market research on the bad debt unsecured loans can however, enable any potential borrower to secure a comparatively cheaper loan transaction, by comparing rates among various lenders and selecting the best available option. Most of the lenders for these loans usually have their own online websites, which form the best source of information on these loans. A borrower could surf these sites and arrive at the bets deal from a reliable lender and apply accordingly. The loan application is an easy and fast process as the lenders also provide the convenient facility of online transactions to the borrowers. One simply needs to fill up an online application form available at every lender’s site, with basic personal and financial information.

The lender gives instant approval decisions for the bad debt unsecured loans after verifying the authenticity of information provided by the borrower. As there is no credit verification involved and nor is the borrower required to place any collateral against the loan, the loan processing is quick and convenient for all concerned. The loan amount is electronically transferred to the borrower’s account, soon after the loan approval and can be used to meet any urgent financial purpose which the borrower deems fit. The borrower need only be careful about the timely repayment of these loans, as any default will further hamper the already adverse credit history of the borrower. Keeping all these benefits in mind, it is not surprising that these loans are fast becoming one of the most popular sources of funds for nay borrower with bad debts and no collaterals.

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Bad Credit Unsecured Loans – Financial Loans Without Collaterals and in Spite of Poor Credit

At times, an individual may be faced with an urgent monetary requirement and not have the necessary security to place as collateral against a financial loan. In such circumstances, he needs to be cautious about the loan plan which he applies for as only unsecured loans can meet his need for loans without collaterals. If such an individual has a poor credit history, then his chances of getting a suitable loan are further diminished, as the poor credit history of a borrower without collaterals is considered as a high risk category by many lenders. However, such a situation does not mean that one cannot get easy financial loans but it simply means that you need to apply for the right category of loans that are meant to cater to special financial cases like yours. The bad credit unsecured loans are one such category of loans which you could find very beneficial considering your financial constraints and special credit rating.

A bad credit could happen to anyone and any financial lender offering the bad credit unsecured loans will understand this situation. Hence, any individual with poor credit ranking and no guarantee to be placed against a financial loan can opt for these unsecured loan options. Also, since a home is the most commonly placed security against a loan, a tenant could also make use of the bad credit unsecured loans, to meet any urgent financial requirements. A potential borrower must, however, realize that unsecured loans come at a higher rate of interest than the secured ones and a bad credit further increases the already high interest charged by lenders. The high interest rate is meant to minimize the risk of a lender against potential loss of the principal amount of loan; hence, the borrower should be prepared to shoulder the burden of such interest rates in lieu of instant cash access.

If you opt for the bad credit unsecured loans, you have the advantage of not placing any asset as collateral against the loan, which could be claimed by the lender in case of non repayment or delayed repayment of the loan. However, this does not imply that the lender cannot take any legal action against the borrower or penalize him due to payment defaults. Non repayment or delayed repayment of the loans will only further increase the bad credit rating of the borrower, adversely affecting the existing bad credit rating and making it even worse.

The online facility offered by most lenders, make it easy to apply for and get access to the bad credit unsecured loans. A potential borrower only needs to fill up the online application form available at the lender’s website, with his basic personal and financial status. The lender verifies the accuracy of the information thus provided and gives instant decision on the loan approval. Once the loan has been approved, the loan amount may be transferred to the borrower’s account within 24 hours of the loan approval, making it convenient for him to meet any urgent financial requirements. It is no wonder, therefore, that the unsecured loans for bad credit holders are fast climbing the ladder of popularity.

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Wealth Building and DIY Financial Planning: Being Your Own Financial Advisor, A Good Idea?

For too long, too many people have handed over responsibility for their investment decisions almost entirely to their financial advisors. This is a bad idea. No one is going to manage your own money as well as potentially you could. The way I see it, anything you can do to create a better life for yourself and your dependents is fair game. So, becoming financially literate and reducing any over-dependency on financial advisors is part of this over-arching objective.

Becoming financially literate not only empowers you and your finances but sets a really good, much-needed example for those around you. In my view, “Becoming 100% financially literate” is something that warrants being on everybody’s list of top lifetime goals.

No Such Thing as a Free Lunch

Have you ever wondered how your financial advisor was getting paid? You probably had a suspicion some financial institution was greasing his palm. Well, as the saying goes, there really is no such thing as a free lunch. Beneath the pin-striped suit lies the thinly-disguised commissions and fees structure that has rotten the financial services industry to the core.

Even now, with financial institutions heavily regulated and the onus on your financial advisor to disclose to you the commissions and fees they get paid for a transaction, this can still result in you feeling uncomfortable and wary, and leave you with a distinct bad taste in your mouth.

After the recent global financial meltdown there is a huge question mark about the validity, integrity and systemic over-reliance on the financial services industry. Instead of being obligated to put your financial interests ahead of their own and create the best financial plan for you, financial advisors are only required by law not to sell you something that’s utterly unsuitable. This combined with the need to make a buck can sometimes mean your best interests aren’t always at heart. As this article will show, there has never been a more apt time to become financially literate and undertake the process of becoming your own financial advisor.

Many financial service providers are either focused on a) commissions or b) service fees. In turn they impart some so-so financial advice and deliver middling returns on investment. Commission-based “financial advisors” are working for commissions paid to them by a brokerage firm, mutual fund company, insurance company etc. Fee-based financial advisors are selling their skills and time for hourly or à la carte rate.

Of the two distinct approaches, fee-based financial advice is the lesser of two evils so to speak. However, commissioned-based services may very well be the most suitable for a small investor. This is particularly true in the case of a smaller investment portfolio where less active management is required. In this instance, paying the occasional commission is probably not going to be the ruin of the portfolio’s returns over the long-term.

Many financial advisors are now what they call “fee based” (i.e. they earn their crust from both fees paid by you and commissions). True fee-only financial planners are still a rare breed. Regrettably a very high percentage of financial planners are not working for you but are essentially sales people for financial institutions flogging financial products for commission. They consciously or unconsciously will tend to sell you a product that pays them the highest commission. So, oftentimes their agenda and yours are completely different.

One Trick Product Ponies

Oftentimes, the only product(s) a financial advisor understands is the one he/she is selling. An insurance agent will promote insurance products enthusiastically whilst your stockbroker will push individual stocks or a basket of shares. In both instances, neither may be aware of your complete financial situation and hence are incapable of giving you advice. The best use of your money at that moment could be to reduce your debts or build up an emergency fund.

Good financial planning is not so much about trying to beat the market or multiplying your wealth. It’s really about making sure your portfolio is well-diversified and that other aspects of your finances – budgets, credit ratings, insurance cover, tax planning, estate planning and retirement accounts – are in the best possible shape. So proper financial planning encompasses more than investments. It should also allow you to protect your assets, minimize your taxes, and take care of your dependents etc., all the while growing your wealth over time.

Your average commission-based financial advisor isn’t likely to think about the big financial picture. On the other hand, fee-only financial advisors are likely to be more objective at analysing entire portfolios.

When to Get Professional Advice

If are you are going to do some DIY financial planning than you will need time, education, experience, objectivity and the inclination to achieve the same level of competence offered by many professionals. To be frank, very few average-joe investors have it in them to become their own financial advisors. They simply aren’t that way inclined and are too busy getting on with their day-to-day lives. So, you need to be brutally honest with yourself about the level of financial literacy you have as you create and implement your financial plans. You can’t afford to punch above your weight, make costly mistakes and possibly suffer a financial knock-out!

So, whilst I think it’s a great idea to strive to become your own financial advisor I do think it’s important to point out that I also believe it’s crucial to have a team of Grade A financial professionals (financial/tax/legal experts) in place whom you can turn to for critical advice.

There are times that you will need a second, more experienced opinion than your DIY Financial Advisory skills may be capable of. Here are a just a few examples of when it’s useful to get professional advice:

When you’re transitioning from one stage of life into another (getting married, having kids, retiring, getting divorced, etc)
Any major financial transaction such as the purchase of a property, buying or selling a business, receiving an inheritance, etc.
When you are at a financial impasse or suffering from inertia and unclear about what to do next.
When you’re looking for the best way to protect your family in the event of an accident, illness or death;
In times of huge economic and market change.
Conclusion:

To become financially literate will require you to become knowledgeable on the financial requirements/constraints you have and the strategies, tools and techniques you will need to achieve your goals. As you delve into the complexity of DIY financial planning and building wealth, you will quickly realize why it is a full-time occupation for even an average financial planner. The question is whether you want to become an expert or whether you prefer to hand-off this financial responsibility to someone else…someone else that may or may not have your best interest entirely in mind. Either which way, this is a decision not to be taken lightly.

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