There are thousands of people in the UK who have a bad credit history and this might prevent you from getting a standard loan. Your credit history is a detailed report of all your current and past financial history. A credit report compiles information that includes any loans, credit cards and mortgages you have or have paid off, your payment history and any outstanding debts you may have. If you do not have a good credit score then bad credit loans for people with bad credit may be the only way to borrow money.
Many people do not realise how valuable a good credit report can be. Having a good credit rating will boost your chances of getting the best deals when it comes to borrowing money or credit. Whenever you apply for a loan, lenders will first check your credit report to assess how reliable and suitable you are to lend money or credit to. With this in mind, you could find it harder to get the most competitive deals with a poor credit rating. If you want to borrow money and your credit score is poor then you should look into bad credit loans. Generally you will find that the better your credit rating the more money you will be able to borrow and the better the interest rates.
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If you have a poor credit history and own a car then a Logbook Loan could be the right loan for you. The way Logbook Loans work is that Logbook Loan lenders lend to individuals on the condition that they give up their Logbook and usually a spare key and other car documents for their car as security against the loan. The person taking out the loan will usually be able to hold on to their car and drive it as normal throughout the duration of their loan which can range from any period of around 1 to 36 months.
The amount Logbook Loans lend tends to vary between £500 and £5000. The main disadvantage to this type of loan is that if for any reason the person taking out the loan cannot make the repayments for the loan then the Logbook Loan Lender has the right to repossess your car. In addition to this due to the greater risk a Logbook Loan Lender is taking with lending to an individual with a poor credit rating the interest rates on this type of loan tends to be higher. With this in mind it is advisable to pay back a Logbook loan as quickly as possible as the quicker you pay back the loan, the less you pay.
It isn’t necessarily easy to get a loan and if you have been rejected by the bank or building society because of bad credit then it may be worth looking into bad credit loans. There are many different types of loans for people with bad credit so don’t lose hope. Some bad credit loans are secured loans. This means that you must offer an asset as collateral for the security of the bad credit loan. The asset is likely to be your home, so keep in mind that you are risking a lot with these particular bad credit loans as if you fail to make repayments on time you could lose your home. You are likely to be able to borrow more money with a secured bad credit loan in comparison to an unsecured bad credit loan. The interest on a secured bad credit loans are also likely to be lower than that of an unsecured bad credit loan because the lender will have the security of an asset.
The length of time that it is possible to borrow a secured bad credit loan for varies but should be longer that of an unsecured loan. Some companies can provide loans for as long a period as twenty five years. The length of time you are looking to get the loan for will depend on what you want it for. Make sure you assess your needs carefully so that it can all be explained to the lender in a succinct manner. The amount of interest you will pay on your loan will vary depending on the bad credit loan lender and how much you borrow. Compare different companies and make sure you get the best deal for you. Read the terms and conditions thoroughly before you apply for anything.
If you have bad credit but need a loan there are lenders out there that specialise in offering loans for people with bad credit. Bad credit loans are especially designed for those who have been turned away by conventional lenders because of their credit history. These loans are available to all regardless of their financial past, whether you have bad, little or no credit have CCJs, defaults or have been blacklisted. When you take out a bad credit loan you can generally take out more money for more time compared to a payday loan. You will also find that these loans are much more flexible.
A great aspect of a bad credit loan is that many of them come with credit rebuilding facilities. This means that by using the loan properly, and making your repayments on time it can help to repair the damage to your credit report which will improve your future chances of borrowing. With the right lender, responsible repayment of a bad credit loan can result in improved rates and conditions over time.
It is important that you remember that with any loan there is an element of risk involved and if you fail to meet the terms of the loan you could find yourself in a debt problem. With bad credit loans you will find the interest rates can be considerably higher when compared to other types of loans. This is because again the lender sees you as more of a risk. Because you are considered to be more of a risk the exact amount that you can borrow may depend on how bad your credit rating is. It is also worth remembering that if you do not repay the bad creditloan you could end up worsening an already low credit score.
You can find secured and unsecured bad credit loans. With a secured loan you are required to put up an asset, usually your home or car, which is used as collateral against the loan. While this can help lower interest rates, as lenders see you as less of a risk because they have your asset, should you default on the loan you ultimately risk having this asset seized should you miss payments.
Make sure you compare different loans for bad credit, looking at all the different features before committing to a lender. Research is paramount because there are some really great bad credit loan deals on the market but you have to take the time to find them. You should never accept the first offer you come across before you have made sure there isn’t a better deal available elsewhere. Using online comparison sites can be really useful because you can easily compare different bad credit loans against each other and easily view all the features of different loans.
The interest rate on a bad credit loan is the most important aspect to consider but please remember that because you are considered to be more of a risk by lenders you will find that the interest rate is higher if you have a poor credit history. The Annual Percentage Rate or APR is the best rate to look at when comparing lenders. You will find that the longer it takes you to pay back the bad credit loan, the more you will pay in interest.
When looking at bad credit loans make sure you understand the small print on any loan before you sign, and take the time to read the terms and conditions fully. If you have any questions do not be afraid to ask them. You should watch out for any hidden administration or arrangement fees to set up the loan. Also make sure you know what happens if you miss payments because late payments could result in a charge. In some cases it could even cost you to pay back the loan early.