Bad credit loans
If you need a bad credit loan, you should shop around for one that will save you money and help to improve your credit history. Your options will be a bit limited, but you can find great deals with a bit of research.
Read our guide to repairing your credit rating
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Where can I find a bad credit loan?
Whether companies are interested in lending to you will depend on how bad your credit rating is. You might find that some lenders are sympathetic if you speak to them in person, but most will base their decision on the results of a credit check which will give them a simple yes or no. You can contact the major credit reference agencies (listed below) for a copy of your credit report if you’d like to see what the problem is.
Don’t stop at the usual high street banks and building societies – many online lenders specialise in bad credit loans and secured loans. Watch out for companies charging sky-high interest rates though. Find out how competitive a bad credit loan is by comparing it with similar loans from other lenders.
Should I consider a secured loan?
If you have bad credit, it’s worth trying to get an unsecured personal loan. However, a series of rejected loan applications may reflect badly on you and make your credit rating even worse. If you’re a homeowner, your best bet may be a secured loan.
You should only take out a secured loan if there’s no alternative, especially if you’re not particularly good with money. The loan will be secured on your house, which means that the lender can take possession of your home if you can’t repay it. If you must sign up for a secured loan, keep your repayments to the absolute minimum by finding a low APR and borrowing as little as possible.
Get advice from a loan broker
How do I choose a bad credit loan?
The best thing to do is shop around and do plenty of research, as your repayments can add up to a small fortune. Try to find the lowest APR and a lender that will be sympathetic if your circumstances change. Before signing anything, ask your lender what will happen if you default on your payments – will you be able to arrange a new repayment scheme? Will you have to pay to do this? What happens if you can afford to repay your bad credit loan early – is there a fee for doing this?
Browse this site before you make any decisions. Credit Choices will answer all of your questions about different types of loan and the lenders available in the UK.
www.equifax.co.uk
www.experian.co.uk
www.callcredit.plc.uk
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