An unsecured loan plan is one of the best ways to make sure that you can get the money that you need without having to drive yourself deeper into debt. Any loan is a big commitment, and even though there is no property on the line like there would be with a secured loan you can still do further damage to your credit if you're not careful. By developing an unsecured loan plan, you can calculate exactly how much you need to borrow and how long it will take you to repay it well in advance of actually applying for the loan.
By having an unsecured loan plan prepared before you submit your loan application, you can greatly increase your chances of having your loan approved by being able to show potential lenders that you're serious about repaying the money that you owe and having an outline so that they can see exactly how you plan to do it.
Examine Your Budget
Before deciding to apply for a loan, it's very important that you are certain you'll be able to afford the loan payments. Take the time to examine your monthly budget closely so as to verify that you will be able to repay the money according to a reasonable repayment plan. Estimate the amount of money that you have left at the end of each month after all of the bills and household expenses have been paid, and you should be able to use this amount in your unsecured loan plan to show how much you can afford to spend on a loan payment.
Of course, if you find that your spending exceeds or is relatively close to your income then you should think very carefully about whether now is a good time for you to borrow additional money. As you make your unsecured loan plan, bear in mind that paying back loans and credit cards may become a problem if interest rates increase or unforeseen events take place in your life; make sure that you have enough money to cover unforeseen expenses before you dedicate all of your excess to a loan.
Know Your Credit Score
When you start working on your unsecured loan plan you should go ahead and purchase a copy of your credit report. By obtaining your credit report and credit score before you begin your loan search, you'll have an opportunity to attempt to fix any mistakes that you find as well as getting to know what potential lenders will be using to judge your credit worthiness. If you find that your credit is worse than you imagined, it might be wise to take a little time to do some emergency credit repair by paying off as many of your older debts as possible or at least trying to bring most if not all of our outstanding debts up-to-date.
Draft Your Plan
As you compile your unsecured loan plan, make sure that you include a copy of your budget as well as records of your income and a copy of your credit report. If you have savings or chequeing accounts, you might also wish to include current bank statements to show the balances that you have. You want your plan to show potential lenders that while you've had credit problems in the past, you are dedicated to turning that around and have taken the time to make a good first step in that direction.