How do bad credit loans work?
Bad credit loans are much like any other sort of personal loan. The main difference between a bad credit personal loan and a mainstream lender is the interest rate. Usually people with a poor credit rating are charged more interest.
If you repay your bad credit loan on time you will start to improve your credit rating, this means the next time you need a loan you could save money by paying a lower rate of interest.
Once you start to improve your credit rating, you will notice your options to borrow money from lenders improve.
Guarantor Loans can help you build your credit rating
A Guarantor loan is a person who knows and trusts you and will be responsible for making the loan repayment if you cant. Guarantor loans are a great way of getting the money you need and for rebuilding your credit rating. If you know someone who is willing to be a Guarantor then a Guarantor loan could be a good solution.
Bad credit unsecured loans
An unsecured personal loan is just that, a loan without the need of a Guarantor or any form of security. It’s important that you understand the repayments, by keeping up with the repayments on time each month you could start to improve a poor credit rating.
Bad credit loans will cost you more…
If you choose a Bad Credit Unsecured loan you will likely pay a higher APR. Other than that there is no real difference.
If you keep up the repayments on your personal loan this could help improve your credit rating;
Improving your credit rating will have benefits the next time you need a personal loan.
You could qualify for a reduced APR and have more Lenders available to you.
Our Personal Loan partners will ask you for some basic personal information,
You will be required to supply your name, your address, the time at your current address, (your previous address if under 3 years),
They will ask about your employment status and your bank details. This will be the bank account used to deposit your personal loan and collect the repayments.
Applying for your bad credit loan
Please ensure you answer all questions honestly for the best possible chance of success.
Lying on your application is illegal and could result in your details being added to a Fraud register (CIFAS).
If you know you cannot afford the loan repayments then a Personal Loan is not for you.
Instead consider taking some advice on getting your finances back into shape with a Debt charity.
Late payments could result in further fee’s being added and possible legal action being taken against you, this could result make it harder to obtain credit in the future.
Remember, your account conduct will be reported to Credit Reference Agencies and will be available for potential lenders to see for up to 6 years.