If you’re finding it hard to get a loan because you have bad credit, there are companies that can help you get the loan that you need.
These bad credit lenders have a more flexible criteria and their terms are much more favorable for those with a bad credit history.
Bad credit loans make life that much simpler
A bad credit loan can help you out of circumstances that are out of your hands. If you’ve found yourself with a poor credit rating and perhaps have been turned down for a personal loan with a bank, a loan may be able to offer you some relief.
That being said, these loans will come at a higher interest rate and may have additional requirements that traditional loans don’t. This may include the requirement of putting up collateral, the help of a co-signer or even the use of a disabling device in the case of a car loan.
Step 1) Assess your bad credit
Before you go any further and apply for a bad credit loan it’s important for you to assess your bad credit by requesting a copy of your credit file from one of the major credit reporting agencies in the UK.
Once you’ve received a copy you will be able to examine the reasons for your poor credit and act to repair the issues. This will take a significant amount of time to do so, for the time being, applying for your loan with a good idea of what lender’s can see when they run a credit check, is a good place to start.
There are reasons why people have bad credit
There are many times when one will buy a car and there will be no mention of a balloon payment that shows up at the end. With a bad credit loan, you will be able to take the loan out with no worries and find the best way to pay your balloon payment off.
You might need a loan because you have maxed out your credit card. Perhaps you’ve mismanaged your loans and missed a few repayment or have been late on paying your bills for too many months in a row.
Some people with poor credit histories have been the victim of identity theft and fraud or have simply trusted a partner or loved one that has gotten them into financial trouble. Whatever the case may be, a loan for bad credit is your best chance of being approved for credit.
Step 2) Determine your needs
Once you’ve received a copy of your credit report, it’s time to determine how much you need to borrow and the time frame within which you can repay the loan. This can easily be done by making use of a free loan calculator.
Remember to always increase the interest rate from prime to a higher rate since you have bad credit. This will simply provide you with a much more accurate figure.
Loan terms generally range from 1 to 7 years and while a longer loan term may offer you lower monthly installments it will cost you more overall. This is because interest is charged on the balance on your loan and the longer you take to pay it off the more you pay.
The pros of taking out a loan for bad credit
There are many advantages to a bad credit loan. You can raise your credit score with every payment that you will make on your loan. Once you have paid off your loan you will be allowed to loan again but, at a better rate.
If you opt for a secured bad credit loan you can also qualify for a lower interest rate but must remember that defaulting may very well cause you to lose your asset.
Step 3) Choose a bad credit lender
There are many lenders on the market that specialise in offering loans to people with an adverse credit history. With so many players, it can become difficult to choose a lender when it’s time to apply. This is where loan comparison can be really helpful.
Loan comparison sites allow you to compare loan offer side by side to find the most competitive or most suitable for your specific needs. You can compare loans based on interest rates, fees and comparison rates, loan amount, loan terms and even additional services such as redraw facilities.
Most loan comparison sites let you compare loans side-by-side while some may have tables with all the data.
Requirements for a bad credit loan
The main requirement for an online loan is that you have to be over the age of 18 years. You will have to be employed or have a steady income that comes into your personal bank account. You will need to be a resident or a citizen of the UK. Double-check your online loan application before sending it.
Step 4) Applying for your loan
There are many ways that you can apply for your loan, there are some companies that will offer to help you over the phone to apply for your loan but, it depends on the amount that you would like to loan.
There are companies that would allow you to go into their branch and apply there or you can apply for an online loan. Applying for a loan online makes the most sense as it’s quicker and easier and will generally yields a much quicker response.
If you followed our steps and made use of a loan comparison site, applying is as simple as following the link made available to the lenders website. Once you’ve followed the link you simply need to follow the prompts and upload your documents as requested.
Need quick cash? Don’t let bad credit stop you!
With the option of the bad credit loan, it is possible to get a loan even if your credit is bad or you do not have the credit, you may pay slightly higher rates but it is worth it.
If you are a person that has never had an account or has ever needed to loan from the bank, then this loan will be perfect for you and your needs. You will find that applying for your loan is easy.