Loans For People With Bad Credit

Loans for People with Bad Credit It has been reported that over one million consumers opted for an unsecured loan in 2009, a level that has been continuing to rise over the past year. As the property market continues to struggle post-recession, more and more borrowers are looking for other ways to obtain quick cash without the need to secure their property.Similarly, unsecured loans are a particularly useful form of finance for homeowners or individuals who do not own their own property, say a tenant or someone who lives with their parents. However, this form of loan can be even more significant for those with bad credit.

A bad credit history could be the result of CCJ’s, blacklisting, mortgage arrears or defaults.Those who have no credit history at all i.e. have never needed to obtain a loan or a credit card, are unfortunately tarred with the same brush and also classed as having bad credit. Adverse credit can remain on your credit history for up to 6 years, which makes it all the more difficult for individuals to obtain financial assistance in their time of need.Unsecured loans for people with bad credit require no collateral as security; therefore interest rates are generally high in order to neutralize the risk to the lender.

These rates are fixed and therefore not affected by fluctuations in the Bank of England base rate.Unsecured lenders have been subject to much scrutiny for the high rates they charge, although they defend these levels by stressing that this form of loan is specifically designed to be repaid over a much shorter period than secured loans; usually around 2 years, depending on the lender, the borrower’s financial situation and the amount of money that is borrowed. For this reason, lenders argue that unsecured loans can sometimes be a cheaper and more sensible option than, say, a credit card, which tend to give the borrower a false sense of security believing they have unlimited money to spend.Nonetheless, borrowers should be wary when looking for an unsecured loan and ensure that they will be able to meet all the repayment terms.

Although the loan isn’t secured against property, if you default and are referred to collectors, your assets could be liable for repossession. Moreover, the amount of money offered from an unsecured loan for a person with bad credit is much less than other forms of loan, usually with a maximum of £25,000. Larger loans can be arranged with some lenders though where the repayment terms stretch over a much longer period, say 5 to 10 years.Understandably, lenders are increasingly cautious with who they will lend to, especially when dealing with borrowers with bad credit. Therefore, it has never been so important to prove yourself as a serious and dependable borrower.

This is much easier on secured loans for example, as lenders take the security of your property as proof that you are serious about meeting the repayment terms. One way in which you can prove yourself to an unsecured lender is by finding yourself a ‘guarantor’, usually a family member or close friend. A guarantor basically undertakes the responsibility of repaying the loan amount should the borrower fail to do so.If you, like many, are unsure of your personal credit history, then you can request a copy of your credit report, some lenders offer this service for free, others will ask for a charge. It is always recommended that you do your homework when looking for a loan, especially knowing you have a bad credit history.

As most unsecured lenders now operate online, it is even more difficult to determine the legitimate lenders from the scams. Additionally, as unsecured loans can be used to cover anything from an unexpected healthcare costs to a larger than expected MOT bill, they can come under various guises, from ‘Personal Loans’, ‘Tenant Loans’ to ‘Car Loans’. So it is important to shop around for the best deal for you and to speak to a financial advisor if you are unsure of the best option for your personal circumstance.A few tips for those who are concerned about their credit rating and are looking to improve their score:Consider a debt consolidation loan. This will not only make your outstanding debts more manageable by combining all into one monthly payment, but it will prove to lenders that you want to prove yourself as a reliable borrower.Find the best loan available. As mentioned above, it has never been so important to shop around for the best loan for your circumstance. Do not assume the first one you come across is the best, as more than likely, it won’t be and you could end up getting into further debt.Pay off your outstanding debts as soon as possible.

This may sound a little obvious, but it is surprising just how much money you could save if you cut out some of the luxuries in your life. For example, cut down on alcohol and cigarettes, take the bus to work or make your own lunch instead of buying something from the nearby shop. Small lifestyle changes like this can make a huge difference to how much you can save, and resultantly how quickly you can pay off your existing debts.Improving your credit history is the first hurdle in your journey towards obtaining financial assistance quickly and easily. The better your credit score, the less complications when applying for any type of loan.Loans for People with Bad Credit it has been reported that over one million consumers opted for an unsecured loan in 2009, a level that has been continuing to rise over the past year. As the property market continues to struggle post-recession, more and more borrowers are looking for other ways to obtain quick cash without the need to secure their property.

Similarly, unsecured loans are a particularly useful form of finance for homeowners or individuals who do not own their own property, say a tenant or someone who lives with their parents. However, this form of loan can be even more significant for those with bad credit. A bad credit history could be the result of CCJ’s, blacklisting, mortgage arrears or defaults.Those who have no credit history at all i.e. have never needed to obtain a loan or a credit card, are unfortunately tarred with the same brush and also classed as having bad credit. Adverse credit can remain on your credit history for up to 6 years, which makes it all the more difficult for individuals to obtain financial assistance in their time of need.Unsecured loans for people with bad credit require no collateral as security; therefore interest rates are generally high in order to neutralize the risk to the lender.

These rates are fixed and therefore not affected by fluctuations in the Bank of England base rate.Unsecured lenders have been subject to much scrutiny for the high rates they charge, although they defend these levels by stressing that this form of loan is specifically designed to be repaid over a much shorter period than secured loans; usually around 2 years, depending on the lender, the borrower’s financial situation and the amount of money that is borrowed. For this reason, lenders argue that unsecured loans can sometimes be a cheaper and more sensible option than, say, a credit card, which tend to give the borrower a false sense of security believing they have unlimited money to spend.Nonetheless, borrowers should be wary when looking for an unsecured loan and ensure that they will be able to meet all the repayment terms.

Although the loan isn’t secured against property, if you default and are referred to collectors, your assets could be liable for repossession. Moreover, the amount of money offered from an unsecured loan for a person with bad credit is much less than other forms of loan, usually with a maximum of £25,000. Larger loans can be arranged with some lenders though where the repayment terms stretch over a much longer period, say 5 to 10 years.Understandably, lenders are increasingly cautious with who they will lend to, especially when dealing with borrowers with bad credit. Therefore, it has never been so important to prove yourself as a serious and dependable borrower. This is much easier on secured loans for example, as lenders take the security of your property as proof that you are serious about meeting the repayment terms. One way in which you can prove yourself to an unsecured lender is by finding yourself a ‘guarantor’, usually a family member or close friend. A guarantor basically undertakes the responsibility of repaying the loan amount should the borrower fail to do so.If you, like many, are unsure of your personal credit history, then you can request a copy of your credit report, some lenders offer this service for free, others will ask for a charge. It is always recommended that you do your homework when looking for a loan, especially knowing you have a bad credit history.

As most unsecured lenders now operate online, it is even more difficult to determine the legitimate lenders from the scams. Additionally, as unsecured loans can be used to cover anything from an unexpected healthcare costs to a larger than expected MOT bill, they can come under various guises, from ‘Personal Loans’, ‘Tenant Loans’ to ‘Car Loans’. So it is important to shop around for the best deal for you and to speak to a financial advisor if you are unsure of the best option for your personal circumstance.A few tips for those who are concerned about their credit rating and are looking to improve their score:Consider a debt consolidation loan.

This will not only make your outstanding debts more manageable by combining all into one monthly payment, but it will prove to lenders that you want to prove yourself as a reliable borrower.Find the best loan available. As mentioned above, it has never been so important to shop around for the best loan for your circumstance. Do not assume the first one you come across is the best, as more than likely, it won’t be and you could end up getting into further debt.Pay off your outstanding debts as soon as possible. This may sound a little obvious, but it is surprising just how much money you could save if you cut out some of the luxuries in your life. For example, cut down on alcohol and cigarettes, take the bus to work or make your own lunch instead of buying something from the nearby shop. Small lifestyle changes like this can make a huge difference to how much you can save, and resultantly how quickly you can pay off your existing debts.Improving your credit history is the first hurdle in your journey towards obtaining financial assistance quickly and easily. The better your credit score, the less complications when applying for any type of loan.