Bad Credit Loans

Bad Credit Loans

Bad credit loans?

What is a bad credit loans simply put a bad credit loan is a loan paid to someone that has either been bankrupt or defaulted on loan agreements before this in turn reflects in your credit status and credit worthiness. The lower the credit score the higher your interest rate you will pay on all finance that you receive ongoing. There are many lenders out there that will deal with people that have poor credit but you should expect to pay at least double the APR that you currently would pay should your credit be perfect. Unfortunately this is the nature of the market and reflects in the extra cost it takes for the lender to acquire the money from the bank as the banks will lend to sub-prime lenders at a much higher interest rate than they would lend only themselves this is because of the extra risks associated with lending to be with poor credit.

The most common question I come across when dealing with people with poor credit it is it possible to improve my chances of getting a loan. Yes it is there are several things you can do to help you through the application stage and make sure your loan is funded in full.

  • Make sure you have all the relevant proofs for income available to hand
  • make sure you have all your outgoings including bank statements available to
  • your guarantor this is someone that will guarantee your payments to the company on a monthly basis by using a guarantor you’re more likely for a lender to accept your payments.
  • Secure your payments against property. A little disclaimer here personally this isn’t something I like to suggest people do as this will put your home at risk should you fail to make your payments but it is an option and being that we are unbiased comparison service we must advise you of all options.
  • Take a smaller loan to start – one should be paying a small loan with the company for a little while they are more likely to lend to you again is a scene you pay your payments on time each month on average most lenders will look at what’s known as a top up after six months of straight on time for payments

Can I improve my credit score?

Yes of course you can you weren’t always have a poor credit score if you make your monthly payments on time and in full every month for all your current credit commitments. Over time you will see your credit score slowly improve this can be checked and experian they do offer a free of charge service to allow you to look your credit file once. I wish to suggest that people continue to make the payments in full and on time every single month this improve your credit score will then allow you after year to look to refinance make sure every year you save your credit scores improved enough for your APR to improve it doesn’t hurt to contact your current lender and ask them can you improve your APR.

Can I settle early then?

Yes you can it is possible to refinance your agreement at any point throughout the term of your loan. Unsecured loans do not have the interest front loaded at the start of the agreement the interest on all unsecured loans in the UK accrues on a monthly basis this means each month that you make a payment you will pay off a little bit of interest as well as a little bit of the balance. You can go to your lender at any time and ask for a settlement figure, your settlement figure will include a rebate of the interest on the term of the agreement that you have left outstanding with that lender. This is always something I suggest you keep on top of as refinancing your agreement within your loan term can result in you saving thousands and thousands of pounds over the term of your loan agreements.

How do I settle early?

There are some lenders in the market that will require you to set your agreement using a debit card or bank transfer some also still accept cheques please note that when it comes to settling your agreement you must allow a few days for the payment to clear for your lender will note that your file is closed and settled in full. Upon settling the loan in full they will contact the local credit file providers to advise them that this finance is settled this will in turn improve your credit score.

Can I make higher payments each month?

Quite often people come to me asking can they make increased payments against the loan even though the monthly repayment amount is £200 they want to pay £250. Yes this is possible and this is something I personally suggest would be a great option should you be to afford the reason this is such a great option follows on from the points above because your interest is incurring on a monthly basis the more you pay the lower the monthly interest will be this will also result in you finishing your loan a lot earlier for example your loan amount is £350 a month you pay £700 a month the balance of your loan will not come down by £700 it will come down by closer to 800 due to the rebate in interest that you receive on a monthly basis.

How do I apply for a bad credit loan today?

To apply for a loan today is a very simple and pain-free experience fill out the form on this site and your details will be passed to our qualified agents who will check what lender Bessie Johnny please note if you keep your wage slip and outgoings close to hand when the lender contact you you’ll be asked to provide them straightaway this making sure your application will be faster and smoother.