Loan For Bad Credit – A Brief Guide

Nobody wants a poor credit rating – it makes it look as though you’re irresponsible with your money (which, to be fair, a lot of people with bad credit can be) and really gets in the way when you’re trying to arrange things like credit cards or loans with banks and lenders. While it can certainly make things harder though, it’s not impossible to be approved for credit if you have problems on your record… providing you know where to look, that is.

The trick to finding a loan for bad credit holders, not surprisingly, is to avoid going straight to a big bank or major lender and try going to a loan broker instead. Sure, it’s possible to do all the legwork yourself and find a few decent lenders willing to offer such loans, but getting a handle on all your loan options at once can incredibly difficult since the best rate may not always be the first one you find. That’s why loan brokers can be prove to be very useful indeed – since they often have a huge amount of lenders and loan providers on their books, they can find a huge number of Bad Credit Loan options for you very quickly. As with the loans themselves though, finding the right broker is important. Not only do some brokers have access to more lenders and loan providers than others, but the fees they charge for their services vary significantly so it’s worth going with one that has a good reputation and large range of lenders to choose from.

Although they may seem like the only loan option available to people with poor credit ratings, Bad Credit Loans actually have their uses. Certainly, the higher interest rate over more conventional loans tips the scales in favour of the lenders, as does the fact that being approved for an unsecured Bad Credit Loans can harder than getting a secured one since loan providers like some form of collateral to insure the loan against should the borrower prove to as unreliable as their credit history would suggest. However, making regular repayments against a Bad Credit Loan can actually bring your credit record back from the brink and lift your rating to something more respectable, making it possible for you to secure more traditional forms of credit in the future. And while the idea of having a chunk of money to spend on anything you please always sounds nice, Bad Credit Loans can also be used as a means of debt consolidation instead to help clear large amounts of existing debt (like credit and store cards), bringing everything together into one single affordable monthly payment.

In Summary

A loan for bad credit…

  • Is known as a Bad Credit Loan
  • Can, over time, help improve your credit rating if you keep up repayments
  • Usually has a higher interest rate than other loan products
  • Is easier to get if you can secure the loan against collateral
  • Can be used to consolidate existing debts and make them more affordable.
  • Are easily sourced with the help of a reputable loan broker

Copyright: Individual Finance, 2010


Bad Credit Personal Loan – A Changed Attitude of Lenders Towards Bad Credit

Are you afraid of applying for a loan, just because you have a bad credit? No need to fear anymore. You need to understand the fact that you are not the only one whose credit status is bad. Bad credit personal loan can be a solution to your this problem.

A bad credit personal loan is tailored to meet the personal needs of the UK residents who have a bad credit. Personal needs may vary from person to person. You may wish to buy a car, your children may wish to purchase a new toy and your wife may wish to remodel the kitchen. Bad credit personal loan support people with bad credit history to realize their dreams.

Bad credit rating people are identified as people who have made any default or arrears on any past loan payments. People who have faced bankruptcy, county court judgments and individual voluntary arrangements are also one of them.

Bad credit personal loan can be used for any personal purpose. The loan can be used for making improvements at home that can give a new look to your home. One can use the loan to consolidate his debts which will help him manage them effectively. Personal loan for bad credit can also act as a medicine to heal bad credit history. You can also use the loan to repay your existing debts.

UK residents with bad credit history can apply for either a secured or an unsecured bad credit personal loan. For a secured bad credit personal loan, a borrower has to put collateral such as an automobile or a property against the loan. Secured bad credit personal loans offer flexible repayment options satisfying the individual needs of the UK residents. An unsecured bad credit personal loan is just the opposite of secured loans; it does not require a borrower to put any collateral.

The rate of interest on a bad credit personal loan is comparatively high because there is high risk involved in lending money to people with bad credit. Loan providers try to play safe by lending at high interest rate.

Before, you start searching for a bad credit personal loan. Your first step should be to find out the exact credit score or the FICO score. A credit score attempts to condense a borrowers credit history into a single number Three credit agencies namely Experian, Trans union and Equifax can help you find your credit report. A credit report is a document that contains a factual record of an individual’s credit payment history and reflects the credit worthiness of an individual. FICO score ranges from 300- 850. A FICO score of 620 and below is considered to be bad. Knowledge of credit score will help you find the best bad credit personal loan.

There are various lenders who will be ready to offer you a bad credit personal loan. Finance market in the past was ruled by the traditional lenders such as banks and financial institutions. Entry of online lenders in the finance market has widened its growth scope. A borrower can browse several loan lending websites. Borrowing a loan online makes it convenient for a borrower to grab the bad credit personal loan at best rate available in the market. The online process of applying for a bad credit personal loan saves the time of a borrower. It is easy to apply for a bad credit personal loan online. A borrower is just required to fill up a small online application form which he can do from his home or office internet equipped computer.

A little effort on your side can help you find the best deal. Collect loan quotes from the loan providers, compare them and find the loan that perfectly matches your financial circumstances.

Bad credit personal loan may help you finance your long awaiting desires. But, take care not to overspend. Try to improve your credit score by repaying your existing debts as soon as possible. Otherwise, you will get trapped in the vicious circle of bad credit rating.