A co-signer is a person who acts like a guardian for the borrower. He takes up the responsibility of paying back the loan, with the interest rate, if the borrower fails to do so. A co signer must be a person who has good credit score. Collateral can be anything that is valuable. It can either be some expensive jewelry, an auto vehicle or even some land that is under borrower's name. A lender keeps collateral to himself until the borrower does not show up with his money. When the borrower pays the lender back his money, he can have his possession back.
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PROBLEM WITH UNSECURED PERSONAL LOANS:
If a person does not have a co-signer and does not have something as collateral then he goes for the second option, Unsecured Personal Loans. However, the problem with Unsecured loans is that they are not easily granted to people that do not have a good credit record. The reason is, in this case the situation becomes risky and the lender becomes hesitant in giving his money because he has no assurance whether he would get his money back or not.
In crisis like this, when a person cannot have the option for Unsecured Personal Loans, the borrower should search for some other options. The other options that are available to him can be borrowing loan from a family member or looking for a lender on the Internet.
TURNING TO FAMILY MEMBERS:
Turning to one's family member can prove to be the best defense. Family members would understand the borrower's condition and will ignore the fact that he does not have a good credit history. One more advantage is that they will not ask for the interest and even if they do it will be a minimum amount.
TURNING TO THE INTERNET:
If the borrower does not have anyone in the family who can help him in this hour of need then he can turn to the Internet. There are many people available on the Internet who are willing to give money to those people who are in need. Just a little research is required for finding the right guy and when the right guy is found, the borrower can have his money back.