It is possible to apply and be approved for a loan, even if you have a bad credit score.
This is as a result of the many lenders in the UK that specialise in offering loans to people with adverse credit records. Whether these loans are secured or unsecured, here’s how to navigate the world of loans for bad credit.
You can get financing with bad credit or no credit
If you’ve been turned down, it doesn’t mean that you are being turned down because you do not have finances to pay the loan, it just means that you have not yet received a credit score that is high enough for the lender to feel secure about giving you a loan.
In this case you’ll need to apply for a bad credit loan.
The benefits of a bad credit loan
If you need to pay for a car or would like to get yourself a new car, but you know that you do not have the credit to apply you could always apply for a bad credit loan and use the loan to purchase your car.
You need to improve or build on to your home but do not have enough credit - do not worry a bad credit loan will be able to help you with the amount that you need. These loans are usually secured but can, in certain cases be unsecured and are as versatile as they are flexible in their qualification criteria.
What does it mean if you have bad credit
Having bad credit simply means that you have an adverse credit record or no credit record at all and therefore have no established credit history for lenders to review when attempting to decide whether to offer you a loan or not.
While the majority of bad credit incidents are a result of poor repayment of debts and financial mismanagement, some are a result of unintentional mishaps or even fraud. Regardless of the cause, many UK lenders that specialise in bad credit finance will be able to assist.
Examples activities that result in bad credit:
- Non-payment on a personal loan
- Late payment on credit cards
- Defaulting on credit agreements
- Non-payment of bills
- Applying for a loan to multiple credit providers
- Closing multiple accounts, credit cards and loans accounts within a short period of time
- Taking out too many loans within a short period of time
Improve your credit score
Did you know that if you can take out other quick loans once you have paid off your bad credit loan? The reason that most have to take out the bad credit loan is that their credit score is not high enough.
But if you are to pay your loan in full and on time every time you will be able to build your credit score to where you will be able to take out other personal loans. These loans will likely be larger and come with more flexible repayment terms as well as come at lower interest rates which means you save money.
Additional advice for those with bad credit
In addition to keeping up with your repayments on your bad credit loan there are a range of other things you can and very well should do to turn your financial situation around.
One of the most important things to do is create a debt repayment plan and budget to ensure that you not only keep up with your debt repayments but pay off your debts fast and put money away in the form of savings.
A debt repayment plan is especially helpful for those with a poor credit history and can be used as a means to become debt free in a manner that is sustainable.
How can you apply?
There are many ways to apply for a loan you can apply online and it will take you about 5 minutes to apply for your loan. You can also apply in branch and, depending on the amount that you will be applying for, you can apply via your mobile phone.
Online loan applications are the quickest and easiest method of getting a loan since you can apply from your phone, tablet or laptop and upload all of your supporting documents in seconds without having to scan, print or fax. Modern applications also allow you to digitally sign a loan contract without the need to assign a physical signature to your loan contract.
Alternatives to loans for people with bad credit
You may want to try and apply for a personal loan from a bank or traditional lender with the help of a co-signer or guarantor that will co-sign on your loan.
If you have a mortgage you may be able to refinance and take out a loan using the equity you have. Another option is to make use of credit cards or overdrafts that you already have.
These are options for those that have been able to pay their monthly minimum repayments or stay within or below their credit limits. Once you’ve made a certain number of repayments or replenished your overdraft you can then use this revolving line of credit again.
You CAN get the loan you need
Yes, most of the big banks and loan companies will offer you a bad credit loan and the best way to find how to apply online is to search the bad credit loan on the site or bank or webpage that you feel happy with.
Once you have done that then you will be able to choose to apply online or you could choose to find branch closest to you. Applying online is easy and convenient.
Bad credit loans do not have to be long term loans, short-term loans have low-interest rates and are easy to pay off. These loan options are also available to those with no credit history and those with a poor credit rating provided that the borrower can prove affordability.