Sometimes it can be difficult to effectively budget for the future. While many expenses are predictable, others tend to arrive without warning. Some financial shortfalls are fairly easy to handle and can be covered by simply dipping into your savings. Others, however, can put a greater strain on your finances.
When you hit a spending impasse and your nest egg falls short of the mark you may find yourself in need of a small personal loan. But if you have an adverse credit history applying for that loan, and actually securing the funding you need, can be easier said than done.
But a poor credit score shouldn’t be a barrier to accessing the money you need when you need it. Even if your credit history is less than impressive you can still access to the quick cash you need to cover any unexpected expenses.
Bad credit loans, sometimes called poor credit loans, are designed to pick up where traditional lending leaves off. They provide urgent funding for people who might be unable to secure their loan through a conventional lender due to a troubled credit history.
Personal loans for bad credit borrowers typically involve more modest sums than conventional lending products. They also tend to come with more restrictive repayment terms. These loans won’t pay off your mortgage or buy you a new car, but they can provide a few thousand pounds to help with home and car repairs, school tuition fees, or the costs associated with moving house.
Your credit rating is, in essence, a distillation of your financial history. It reflects your past spending patterns and credit use. Loans, credit card purchases, and utility bills all combine to create a snapshot of your creditworthiness. Even something as seemingly unimportant as an online subscription service impacts your credit history.
Lenders rely on a loan applicant’s credit rating to determine their risk as a potential borrower. The lower the score the higher the risk, with high risk borrowers often finding it harder to qualify for traditional loans.
A bad credit rating is usually the result of some, or all, of the following factors:
Traditional lenders rely heavily on credit scores to determine a borrower’s creditworthiness. Alternative lenders look beyond your credit score, looking at your current income and debt profiles. This gives bad credit lenders more flexibility in the approval process, making it possible for customers with bad credit to secure the personal loan they need when faced with a financial shortfall.
When it comes to personal loans for bad credit borrowers there are a couple of basic lending options available:
There are pros and cons to all lending products. Personal loans for bad credit are no different. The advantages are clear. You receive the cash you need when you need it, often deposited directly into your bank account. You are then able to address your spending emergency without any undue delays.
Bad credit loans also give you the opportunity to improve your credit rating. Repaying your loan on time and in full demonstrates your ability to successfully manage your finances. Successfully discharging your loan will add positive points to your credit score, helping to build a positive credit history.
There are, however, some definite disadvantages to bad credit personal loans. The loans are typically more expensive than those secured through conventional lenders. As a ‘high risk’ borrower you should expect any loan you receive to include higher interest rates as well as processing fees that will add to the total cost of your loan. You should also understand that these are short-term loans, and as such the repayment terms will be highly structured and relatively brief. There won’t be much in the way of wiggle room when it comes to discharging your loan.
At Bad Credit Loans we keep the application process as simple as possible. All you need to do is fill in the online form stating the amount of money you wish to borrow. We will also need to collect some basic financial information in order to process your loan request.
To qualify for a loan applicants must meet the following requirements:
In order to qualify for a personal loan you will need to meet certain income requirements. In addition to your credit report lenders will consider your employment status, current income and pay schedule, and the total amount of debt you are holding. You may be asked to supply additional information before a final determination is made, so it is important to keep yourself available until the application process is completed.
Personal short-term loans can help provide the financial flexibility bad credit borrowers often lack. In addition to delivering the funds you need when you need them your loan can help you rehabilitate your credit history. Remember, smart loan management is one of the keys to a better credit score. Make your payments on time and discharge your debt completely and you will see your credit rating climb.
If you would like to access valuable advice and counselling regarding money management and improving your credit rating you can tap into the following UK government services: