Getting a Bad Credit Loan in the UK
UK bad credit loans are offered to borrowers with poor or weak credit histories. If you had trouble with your finances before which led you to have missed loan payments, you should know that this likely tarnished your credit history. Borrowers suffering from bad credit ratings can still apply for a loan in the UK.
If your credit rating is very poor, banks and traditional lenders will most likely turn you away. The next viable option is to work with a direct loan provider that specializes in bad credit loans. You will find plenty of direct lenders simply by searching online. The application is quick and easy – all you need to do is fill up a loan application form and submit the necessary documents as required by the lender. Funds transfer will be done electronically to your bank account after loan application approval, in as short as a few hours up to a few days.
You can also visit a loan broker’s website, fill up a form and you will be matched with different loan providers based on your preferences and qualifications. The downside is that you will be paying for broker fees but if you have no time to spare to look for a reputable lender, this is also a good option.
You should understand that getting a bad credit loan in the UK only provides temporary financial relief. You must be responsible for handling repayments for your bad credit loan to prevent further damage to your credit score.
One way of taking control of your finances and managing your payments when you have a number of accounts you are making repayments on is consolidating your debt. While it is common for lenders to require borrowers to have a good credit store when consolidating their debts, there are also those that might give borrowers with poor credit a chance.
Consolidating debts for bad credit borrowers
There are lenders that offer personal loans to borrowers even with their poor credit rating. Often, these loans are unsecured and large. Generally, the interest rates are higher compared to what standard loans will charge. But it may offer you a way to reduce whatever you are presently paying since consolidating your debts means putting all the balances together into just one loan. Generally, you can consolidate car loans, personal loans, and credit card debts into just one single loan that you then pay for every month.
Benefits of debt consolidation
Paying only one single payment every month is perhaps the best advantage of consolidating debts. Instead of having to deal with several monthly repayments, which could be confusing and hard to keep track, you’ll only have to make a single one. To many people, this is one way of managing their debts better as well getting more control of their finances. You can reduce your interest and save money in the process. It is possible to reduce interest rates if you can get a debt consolidation loan with a lower rate compared to what you are subjected to with your current accounts. Most loans come with fees so getting them all consolidated means not having to pay all these separate fees.
Consolidating your debt can help you get into a better financial standing since you will have more control of your repayments. This allows you to have a much better chance towards repairing your credit to get a better loan deals in the future.
Debt consolidation loans for bad credit borrowers
It is possible for borrowers with a poor credit rating to get a debt consolidation loan. However, the downside is that he might get subjected to a much higher interest rate. You can try certain steps that will increase the chances of getting the loan approved though.
For instance, getting a secured loan might help you get a better chance of getting approved. in this loan, you are required to present a collateral to guarantee the loan. This makes you less risky in the eyes of the lenders despite your bad credit thus, ensuring approval and even better loan rates.
Avoid applying for several loans since every single application can affect your credit records negatively due to the hard checks that will be done by lenders. Waiting for a month or two after you get declined for a debt consolidation loan is always ideal.