How to Secure an Unsecured Loan

Securing an unsecured loan became harder after the recession that rocked the United States economy starting in 2007. As the nation's unemployment rate skyrocketed and available consumer credit plummeted, banks' lending rules became stricter. Consumers wanting new credit cards or unsecured loans are faced with tough credit requirements and high interest rates. Only consumers with the best credit scores are being offered the best interest rates and amazing offers that were once common among lending institutions.

Things You'll Need

• Driver's license
• Social Security card
• Paycheck stubs

Instructions

1. Pull your own credit report if you have not already done so for the year. Your free yearly report is the first step in ensuring that your credit is not being hurt by wrong information.

2. Contact, in writing, any company who is listing erroneous information on your credit report. Ask for proof of the debt and send the letter through the post office with a proof of receipt card attached. This will give you a record of when the company received the letter. You can also dispute a debt through the credit bureau which may result in a faster removal of any wrong information from your credit report.

3. Check the websites of multiple lending institutions, including your own bank, for information on their current interest rates. With good credit, you might be able to get the advertised rate lowered but having that information gives you an idea which institution will be cheapest for your situation.

4. Apply for an unsecured loan through either your bank or the institution with the lowest advertised interest rate. If you have been a customer of your bank for an extended period, you might find they are more willing to work with you.

5. Provide proof of your income, identity and address. Your driver's license, Social Security card and two month's of check stubs will suffice. You may still be asked for additional supporting documents such as a piece of mail addressed to you or a utility bill.

6. Read over the loan paperwork in its entirety. Skipping sections just to get the signing complete is a sure way to miss information on fees or extra loan conditions. Ask questions of your loan officer if anything in the loan paperwork is confusing or worrisome.

Tips & Warnings

• Unsecured loans are riskier than other types of loans for a bank and as such often result in higher interest rates than secured loans.

References

• Lending Tree: Unsecured Personal Loans