reason

kjones123

what is the difference between unsecured bad credit loans. why their interest rates are so high ?

KingElvis

Because a high percentage of the people who take them can't be trusted to pay them back.

paddyrg

Unsecured means they don't have a share of your house to guarantee the debt will be paid. High risk, more defaulters, so higher costs, so have to charge borrowers more so as not to lose out.

BugsyBrowne

kjones123 wrote: »

what is the difference between unsecured bad credit loans. why their interest rates are so high ?

Its all about Risk.

kjones123

that means both are basically same ?
difference is in their names

Dabooka

Are you asking the difference between unsecured AND bad credit loans?

ILW

He/She is a student it appears.

chalkie99

If you mean the difference between unsecured AND bad credit loans then no, they are not necessarily the same.

An unsecured loan is one which does not require the borrower to provide a guarantor or allow a charge against their property. It can be made to anyone regardless of their previous history but, obviously, is more likely to be given to someone who can demonstrate they are likely to be able to make the repayments.

A bad credit loan is for those who are less likely to make the repayments because they do not have a proven record or because they do have a record and have failed to make them!

These loans, depending on the decision of the lender, can be charged at a higher than normal rate and may require security by way of a charge on property or a suitable guarantor.