Bad Credit Loans: What are they?*

Image Source Pexels
*This Is A Collaborative Post*

As The Name Suggests . . .

Many of you will be aware of bad credit loans and what they are, but for those of you who are perhaps unfamiliar here is a brief run down. As the name implies, these loans are intended for people with a bad, poor or insufficient credit history. Because of this, generally you can expect higher rates of interest as well as more restrictions than for ordinary loans due to the lender viewing such loans as having a higher level of risk attached. This in itself is a crucial point to remember. 

Who are they for?

In a nutshell, bad credit loans are for people who simply cannot get approved for a standard loan, this normally stems from the belief of the lender that the money might not be paid back.

So, here's a list of some of reasons why you might be refused approval for a standard loan:

1) Have a lot of debt.

2) If you have applied for loans/credit too frequently (e.g. more than once every few months).

3) Missing payments or defaulting on your accounts.

4) If you have difficulty repaying current lenders and if you receive a County Court Injunction (CCJ), Individual Voluntary Arrangement (IVA) or Debt Management Plan.

5) If you are declared bankrupt.

6) If you don't have an extensive enough credit history yet (e.g. Could be due to one's age or being new to a country etc).

Image Source Pixabay

Search For A Loan Which Suits You.

In terms of finding a loan which will help and not hinder your credit rating further I have to say it is a task made much easier thanks to online comparison websites. You can enter your details it will match your requirements against the criteria of various lenders in order to then match you with the best loan option for you.

I would say that such a product (Bad Credit Loans) Should be thought very seriously about and unless you are positive you will be able to repay it, do not go there. However, it is a simple fact of life that millions of people are struggling day to day, and especially since the crash of 2008, and there are times when a bad credit loan might be the only option you have to see you through X amount of days, weeks, or months.

Managing Your Loan.

If you manage your loan effectively, and you make repayments on time for the full term of the arrangement, then you will be able to improve your credit score gradually over time. Meaning that in future you might be able to borrow money from a greater variety of lenders while being in a position to negotiate better terms and rates of interest on future loans.

For anyone struggling to pay off debts at the moment, free advice is available so please investigate further, if you are unfamiliar with the potential benefits of a debt consolidation management plan and other forms of debt management it might well be worth your time. Here is a link for those of you in the UK and the United States.

Follow Me:

1 comment

© A Classic Gent

This site uses cookies from Google to deliver its services - Click here for information.

Copyright A Classic Gent