Anybody who has an unfavourable credit rating or bad rating who wants to make an application for credit but can’t can use bad credit loans. This mainly is a result of the debtor not meeting payments on a financial obligation for example, overdrafts, credit cards, a mortgage or even personal loans, at some point within their past. As a result they have a poor credit score which means they have been marked as somebody to whom it’s a high risk to lend to.
There are numerous different lenders that offer loans specially designed for people with negative credit records. Anybody is able to make an application for bad credit loans but your work and age will be taken into consideration before any application for a loan can be processed. The minimum requirements are you’re employed in a full time job and over the age of eighteen.
Not every lender offers this type of loan and you’ll find that generally bad credit loans come with a high ARP (Annual Percentage Rating). There are accredited loan providers, often known as sub prime lenders that’ll give loans to those who aren’t able to obtain a loan from a traditional high street bank or a building society.
Even if you normally are a lender who is reliable you certainly would be shocked at the impact some overdue payments can have on your ability to be able to qualify for loans. Even if you have never borrowed anything, you still might find it hard to secure a loan. After all, the loan provider has not got anything to prove you can be relied on to make your repayments.
If you have made an application for a few loans and have not been successful, that can leave a black mark on your credit score. Should you have paying a bill, or had a payment refused or a cheque bounce because you did not have enough funds, this can appear as a mark.
If you have had difficulty meeting payments before, you might want to safeguard a bad credit loan in case injury, redundancy or health problems stops you from making your repayments. These kind of PPI (payment protection insurance) plans have been mis sold before and have a bad reputation, but for the right person they can be really useful.
Because you’ve got a poor credit rating, lenders are taking on a big risk when loaning you cash. At the end of the day, they want to see some return on their money, which is why the rate of interest can be high. Because of this you’ve got to factor in the cost of the interest when making an application for the loan, because it could mean that you end up paying back a lot more than you originally borrowed.
If you apply for numerous bad credit loans at any one time, then did you know this can actually end up damaging your credit score even further. Every time you make an application for a loan, it’s documented on your credit history, and if you make an application for a lot of loans then you credit rating will take a hit. With this in mind, try to spread out your application for loans, instead of making an application for multiple loans on the very same day.
Whilst other loans are difficult to get if you have got a poor credit; bad credit loan approval rates are high which range from roughly 80 per cent-90 per cent.
The very best aspect of bad credit loans is that you need not worry about your past credit record since the loan providers don’t bother about things such as this. Instead, they look at the capacity of the applicants to pay back the loan, not like conventional methods of lending where the past financial record forms one of the main factors of whether to approve a loan application or not.
These loans also come with the benefit of providing you with higher amounts of money in a short span of time, although the more money that you apply to borrow, the more interest you pay.
If you’ve had problems with your credit score before because of late repayments and CCJs, securing a bad credit loan offers you the possibility to rebuild your credit rating. By paying back your bad credit loan in full, you can improve your credit score, thus building a sturdy financial standing.