Bad Credit Loans
Can I get a cheap loan if I have bad credit?
Although this may come as a shock, it is possible to qualify for a cheap loan even if you "do" have a bad credit rating. A number of lending companies within the UK will consider bad credit applicants for their cheaper plans, providing that the individual is a homeowner and is happy to secure the loan against their property.
Are secured bad credit loans a good idea?
Secured bad credit loans are only a good idea if you can reasonably justify the use of one. Secured bad credit loans are likely to be far cheaper than the unsecured alternative; you will be able to borrow more and will also be able to pay it back over a longer stretch of time. However, if you happen to default on the repayment of your bad credit loan, you run the risk of losing your home. This is the main factor, which you need to consider before selecting this route. If you know you can afford the repayments, you are unlikely to have any problems, but if you are unsure, it may be best to steer well clear.
Can I get a bad credit loan if I am not a homeowner?
There are only a select few lending companies within the UK, who are willing to offer bad credit loans to non-homeowners. There are also some restrictions for which non-homeowners need to consider, these are: -
- Unsecured bad credit loans are typically of a low value (higher amounts are likely to be refused).
- Unsecured bad credit loan repayment rates are often far higher than mainstream loan plans.
- Unsecured bad credit loans are only usually available over a short term.
The aforementioned points may appear to be slightly disheartening, but it is important to remember that they are relative to the UK borrowing population as a whole. It may well be that the industry average for a low value loan, is actually more than you intended to borrow in the first place. It is also possible for the industry average repayment rate and loan term to fit quite well into your original expectations.
Are their any additional charges?
Some providers, but more specifically brokers, may apply an additional arrangement (administration) fee onto the cost of a bad credit loan. These fees and their eligibility will vary from broker to broker, and will be applied as either part of the loan repayment or possibly even in advance of the search. Additional fees of this type should be explained to you before your decide to pursue the loan, in order for you to make a decision as to whether you accept them or not. For your reference, Cheap Loans
do not charge fees of any kind, on any of our loan products or as part of our service to you.
Are their any ways to better my credit rating?
The simple answer is "yes" it is entirely possible to alter your bad credit status, however, there is no quick fix solution to doing it, and it will involve a high degree of dedication and adoption of new financial management skills. The best and most effective ways to resolve you credit status are described below: -
Clear your credit - Make a conscientious decision to clear as much (or as many) of your overdue loan / credit commitments as possible. Your ultimate goal is to prove to the lending market that you are reliable should credit be granted. The best way of displaying this is through positive management of your existing credit, evidence of which will then be demonstrated once a credit search is performed, by a lender.
Consider a debt consolidation loan - Debt consolidation loans are a practical way for an individual with many debts, to manage them more effectively. If you have bad credit as a result of missing payments through affordability issues, a debt consolidation loan may also provide a handy route to making them more affordable. Again, once you are back into the repayment reliability fold, your credit rating should start to improve.
Review your credit file - It could be that you are classed as having bad credit, but are totally unaware of it. This is actually quite common, and arises as a result of innocently missing a payment or two in the past, being branded with a default for doing so, and allowing its affect to worsen through not doing anything about it (because you didn't realise that it existed). Checking your credit profile will allow you to erase any grey areas that are there, which will eventually have a positive effect on your status.
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