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Representative Example: £400 loan repayable over 39 weeks at £18.96 per week, Rate of interest 113.46% p.a fixed; Representative 498.78% APR, Total amount payable is £739.44.
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If you want or need to buy something and you don't have the money you need to do so, you have two options. You can either save up for it or get a loan. Saving up is ideal if there is no rush to get the item you'd like. However, if it is an emergency, such as replacing a faulty fridge freezer or getting a new boiler fitted, loans may be worth considering.
Some people find it easier than others to borrow money via a loan. If you have a poor credit history, you may well find many lenders will refuse to consider you. However, this may not mean you cannot get a loan. You may still be considered for one even with a bad credit score if you try finding a lender offering bad credit loans.
In this article, we are going to talk about approaching a direct lender for credit if you already have a poor credit rating. We are also going to cover the things you must consider before applying for a loan from a direct lender. People with a bad credit score may be able to get a bad credit loan, but there are a few things you should know about first. We'll cover those here.
If you are looking for bad credit loans, you will usually take one of two routes when finding lenders offering such loans:
A direct lender is one that offers loans (including bad credit loans) without someone acting as a go-between, such as a broker. This might mean a bank or building society, for example. If you have a bank account with the bank you apply to, they may pay the loan directly into that account if the lending decision goes in your favour. Some will consider applicants with a bad credit score. Some even specialise in helping people get a loan with poor credit scores.
All lenders, direct or otherwise, must be regulated by the Financial Conduct Authority in the UK. You can check the credentials of any company you come across when you are looking for credit and loans in the UK.
It is not possible to guarantee that any individual can get poor credit loans. In some cases, a person's credit rating may lead to a refusal when a lender reviews their financials - ie. what they can afford. These loans prioritise affordability over credit score. So, even if your score wouldn't disqualify you, your monthly income minus outgoings can.
If you have a bad credit history, do everything you possibly can to improve your credit score before trying to get more credit. We'll cover this in more detail later. You should also think about whether you need the credit as quickly as you think. You may be able to borrow from a family member, for example, rather than getting credit. Another possibility might be to forgo some regular yet unnecessary purchases or to look for ways to save up for what you need instead of applying for credit.
Always consider every option, especially if you know you have bad credit and your credit score needs work. Your credit file is a bit like a financial footprint. You want to keep that credit file looking as good as it possibly can.
Most people have heard of payday loans. Some people with bad credit apply for a loan over the extreme short term. Payday loans are designed to be repaid by the time you next get paid, hence the name of the loan. This may mean getting credit for two or three weeks, for example. These firms must be regulated by the Financial Conduct Authority, as must all other lenders.
Payday loans may work for you if you want to borrow a small amount of credit. However, they can incur a high interest rate. A representative example for payday loans and other credit loans will show the difference between them.
In theory, you could get this type of credit, pay it back quickly, and that would be the end of it. If you met the terms laid down with this line of credit, you may improve your credit score for the future. However, you may be able to find better terms with another lender.
Of course, if your credit score lets you down, you may not get accepted anyway.
When you think about taking out a loan, make sure you shop around. Don't complete an application form without doing this. The more information you can get hold of first, the better. For example, the interest rate offered by various lenders will vary. Make sure you look for bad credit loans rather than standard ones. Loans for bad credit incur higher interest rates, so you should be aware of the difference in monthly payment if you apply for this credit.
Every potential loan should have a representative example. Borrow this amount from us and this is what it will cost. That's the basic idea. This means you can more easily see how much you'll pay. It considers the interest rate and the total cost of the loan over its lifetime. Bad credit loans online will display this information, and you can get the same details if you visited a bank, building society, or similar outlet in your high street.
If you formally apply for a poor credit loan, a lender will check your credit history. This is a hard check. It will show if anyone else looks at your credit rating in future. As such, it is never a good idea to apply for several loans in quick succession.
However, you can find out in theory if you might be accepted for credit. A lender can consider you and perform a soft check to see whether they might be interested in lending to you. If they do consider you for a loan with bad credit, they will not run a hard check without asking for your permission. This means you are in control and you can see in theory where you stand before taking things further.
We mentioned this earlier, but let's cover it in greater detail here. When you formally apply for credit, lenders will check your credit score before deciding whether to issue a loan. All loans are subject to checks like these. If your credit score shows signs of a poor credit history, they may refuse you. If you already have serious money problems, you may not be able to pay it back if they do loan you the credit you would like.
Get a copy of your credit history first. Look through it for any errors, as they can happen. They can form part of that financial footprint, following you around even though they're incorrect. Get those corrected and then work on your current financial situation. For example, late repayment can cause issues with your credit rating, even if you do make your monthly repayments eventually. There are numerous ways to boost credit scores. Do whatever you can to boost yours.
A P.A. fixed rate offer tells you the total amount you'll pay in interest on your loan, plus the amount borrowed, of course. A variable rate is usually lower, although it could rise during the lifetime of your loan. Either way, make sure you find out the figures before you apply for a loan.
Late repayments could incur charges that would push up the total repayment, along with contributing to a bad credit history. If you're having trouble with your credit rating anyway, do everything you can to improve it. If you are accepted for one of the poor credit loans offered by direct lenders, be sure you are strict about meeting the monthly payments. This applies no matter whether it is a short term or long term loan designed for people with bad credit. Make sure your credit report doesn't suffer.
Bad credit loans serve a purpose, but they are not suitable for everyone. They can cause you serious money issues if you do not approach them responsibly. Before applying for bad credit loans, you should consider whether there is a better approach you could take. If you are already in debt, it will be much harder to get bad credit loans anyway. If you can improve your credit, you'll find it much easier to apply for a loan in future.
People with bad credit can repair their credit score, but it takes time to do so. Your credit score may exclude you from getting loans for bad credit. Conversely, if you get a bad credit loan without first considering all aspects of doing so, you may struggle to meet the repayments. Be realistic about your situation. If you have money problems, for help go to the Money Advice Service.
As a warning, late repayment could incur additional fees and charges. These should be made clear upfront for the loan you are considering. Late payments can also show on future credit checks.
We're sure you can name a few. However, they do not all offer loans for people with a bad credit score. Some only focus on people who do not have poor credit. Sorting through the loans you may or may not be able to apply for can be tricky and time-consuming.
Keep reading to find out how we may be able to assist you in finding the bad credit loan you are searching for.
Many potential applicants want to get an instant decision about a poor credit loan. They may want the credit quickly. However, while a direct lender may give you a quick decision, it may not be instant. They need to check your credit score and consider you in relation to their lending criteria for a bad credit loan.
An instant decision would be lovely, no doubt, but it is important to be realistic. That said, they want to offer trusted customer service. They want to provide loans for people who need them. So, they will try to supply the customer service you need and won't keep you waiting too long for a decision.
Yes, you can find plenty of lenders online to consider when you wish to approach one for a bad credit loan. The same criteria apply as they would if you completed a paper application form. Instead, you'll complete an online application form. Applying for loans online can be easier as you can do it from the comfort of your home.
It is important to understand how loans work. If you pass the credit check and you are approved for one of their bad credit loans, you won't necessarily get the money on the same working day. It may take a little longer to receive it. Before applying, you should ask whether approval might mean getting the loan in one working day or longer. Their FAQ sections are designed to help answer common queries like this one.
Whenever you look for credit, it is best to look at several loans to see which one suits you best. Bad credit deals are available from multiple direct lenders for bad credit personal loans uk. Hence why we suggest comparing representative APR figures for all the possibilities you find. These allow for a more realistic idea of how one offer stacks up against another.
Another advantage of going straight to a lender is that they won't need to pay commissions or other payments to a broker for delivering the lead (i.e. you). This could be reflected in the amount you pay.
Credit checks, monthly repayments, loan application paperwork... you've got plenty to think about when you are searching for direct lenders for personal loans with bad credit. If you are wondering where to get the loan amount you need and that feels difficult to get, we could help. There are 50+ direct lenders in our network, so you could find out if you are eligible for a loan from one of them.
Our guide to bad credit personal loans direct lenders only UK was designed to help you find out more about getting a loan direct in this way. Remember to carefully consider all loan decisions before accepting any offer you may receive.
The good thing with Loanza is that our search is no-obligation, free and doesn't come with any hard checks. Once you see your options, you can decide whether you'd like to proceed or not.