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What Are CCJ Loans?

If someone took court action against you, you may have a CCJ on your credit file. This is recorded on your file which could affect the chances of you getting credit. When lenders will see this on your record, they would immediately consider you a credit risk. Whether you’ll get approved for a loan or not would depend on the status of the CCJ. If it has been satisfied, it would mean that there is a very good chance that you can still take out a loan. 

There are lenders who would be willing to extend a loan to you, depending on what type of CCJ is on your credit file. However, since you’re a high-risk borrower, you can expect that the interest rates involved will be rather high, so expect a loan that is going to be rather expensive. In addition, the lender will likely need you to provide them with some form of security or a guarantor before approving the loan. 

Guarantor loans

You can sign up for one even with a CCJ. You’ll need someone to back your loan in order to get approved between £50 and £7,500. The guarantor will be responsible for paying off your loan if you cannot make the payments at some point. 

Short-term loans with high costs

Also referred to as payday loans, these loans are meant to be paid off within a short period. Loan amounts can range from £100 to £1,000. Generally, these loans need to be paid off within six months. These loans are also considered pricier compared to other standard loans. They should be considered as a last resort when there s nowhere else you can go to. You’re advised to compare your options too and to make sure you have the means to pay for the repayments involved.

It’s necessary to never apply for CCJ loans unless you’re positive that you can afford the repayments. You’ll only end up causing yourself more financial issues if it turns out that you cannot pay it back. 

A high interest-loan can feel like dragging a huge weight around. If you have a number of them, this makes paying them off even harder to do. If you are faced with the dilemma of paying off a number of high-interest loans, below are some alternatives that you certainly need to consider helping you get out of it. 

Loan consolidations

You want to get rid of high-interest accounts. To achieve this, you can choose to get the loan consolidated into a single loan that will get charged a single interest. If you’re lucky, you may even find a loan that will be charged at a more affordable interest rate. Managing a single loan will be so much easier than having to deal with several repayments, due dates, and interests every month. 

Negotiate for a lower interest

You can always check with your lender to see if there is a way to rework the interest rates you are paying. There is no harm in trying to negotiate a more affordable interest. If you have been paying a debt for at least a year and have religiously made your payments on time, it is always easier to convince the lenders to extend to you a better rate when you have shown them how responsible a borrower you’ve been.

Use a credit card transfer

You can also choose to transfer the loans to a zero-interest credit card. If the card credit limit is enough to cover all your high-interest loans, you can make a balance transfer to pay off the loan and get rid of the high-interest rate. However, you do have to see to it that the card balance is paid off before the zero-interest rate offer expires or the regular interest rate will kick in. There are fees associated with the balance transfer too- often 3% of the actual transferred amount. So, be sure to factor this in before you push the decision through.