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So even though such loans do not need collateral or security, you would have to pay for higher interest rates than other kinds of loans.
A problem can arise if you want a loan when you have a bad credit rating and cannot raise the funds via a lender that requires you to undergo a credit check or asks for some kind of security that you cannot provide.
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It can be due to any of the following reasons - defaults in previous debts, arrears, and declaration of bankruptcy or CCJ.
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