card guide
Bad Credit Loans

Getting it bad

A lot of things have change over the years: none more so than the English language. Today’s teenagers are prone to use all sorts of words that have been invented either as a result of texting or simply to as a result of them wanting to adopt a form of language as their own.

Take the word “bad” for example. Does it mean “bad” or does it mean “good”? In our case here it definitely means “bad”, in the sense of ‘not good’. And when you try to get a loan, if you discover you have a bad credit rating then you really have got it bad.

What not to do

Don’t panic. If a credit rating agency has decided that you are a bad credit risk then that is more or less it. To change it is quite difficult, but not impossible. You can appeal and ask the rating agency for a copy of the details they hold on you so you can at least register a reason in the file for the poor rating. But this is only of help if there is a valid reason, like being made redundant or suffering a business failure.

The two main credit rating agencies are Experian and Equifax. Any company that you approach for a loan will be able to tell you which agency they use so you can communicate with them about you credit rating. But none of that will necessarily change you credit rating, so what does that mean for the loan that you want to take out?

Expensive

First of all it is going to cost you a lot more than if you had a good credit rating. This is another of those things that have changed over the years: today’s financial services companies tailor each individual loan specifically to each customer’s application.

Typically, as a customer with a bad credit history you may well find yourself having to pay almost double that of somebody with a good credit history. For example, many personal loans rates are at about the 6.7 – 6.9% rate. Contrast that with average bad credit loan offers of about 12.9%. Not only that but you may well also find yourself being subjected to a completion fee and other fees too.

Basically, what the companies are doing is making sure they are going to be able to earn money from you even though they think you will default on the loan.

An Englishman’s home is his castle… and his security

As somebody applying for a bad credit loan you may also find that the lending company requires you to be a home owner. This implies the loan is a secured loan. Always check the small print and don’t forget that “Your home is at risk if you do not keep up repayments on a loan secured on it.”

You may also find the lending company is a little more specific in what they will allow you to take the loan out for. When somebody with a good credit rating comes along they will be lenient if that person wants to go off and buy luxury goods, as long as the applicant’s other debt is not over-whelming. However, when somebody who has failed to meet all their debt obligations in the past applies, especially if they still have any other debt outstanding, then the loan company will expect the new loan to be designed to do something about those other debts, in other words, a debt consolidation loan.

It won’t always be the case, but you may find yourself having to persuade the lender for the loan if it is for something other than consolidation.

Always look on the bright side of life

At the end of the day, you may need to look on the bright side and remember than it doesn’t necessarily take a vast amount of time for your credit rating to improve. After all, if you could wait, say twelve months, you may find loan companies treat you differently.

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Posted on: [ November 03, 2017 ]       Add to Del.icio.us   Digg it   Add to Blinklist   Add to FUrl   StumbleUpon