Recent statistics show that 20-25% of adults in the United Kingdom have some form of poor credit history. These are the people who may be finding it hard to get approval for a home loan, credit card, car loan etc. With many lenders available today you should be able to find yourself a bad credit loan lender to suit your circumstances. Having to accept higher interest rates are the norm for a bad credit loan, sometimes between 2-3 times the interest rate for a person with a good credit rating.
There are many specialist loan companies today in the United Kingdom that deal with bad credit loans. Once it was quite difficult to obtain a loan if you had a bad credit history, but now with as many as 1 in 4 adults in the UK have had some form of bad credit. The growing lists of lenders are, sympathetic to people who have had credit problems before.These bad credit loans aren’t quite as appealing as loans offered to customers with good credit ratings that have built a good level of trust. The loan companies who offer these loans know that you will accept their high interest levels as they are the only ones who will approve your loan. A bad credit loan can have an interest rate up to 3 times higher than that of someone with a good credit rating.Lenders are now providing loans for people who were listed as bankrupt, had a CCJ, or a history of defaults, so you can get on with repairing your credit history and establishing yourself as a reliable customer.
Many people can end up with a bad credit history through no fault of their own. With divorce rates on the rise and redundancies common today, it is little wonder that so many people now experience financial difficulty. With our swipe and a spend culture also leading many into too much debt these people have found it difficult to make repayments. If you have only had trouble paying your debts for short periods you will be seen as a good risk, where as if someone has been struggling for a long time to make repayments, lenders will see these people as a bad risk.One other factor which can affect someone’s credit history is previous applications for credit. Many people that get caught deep in debt with credit cards will often apply for another card with a low balance transfer fee, hoping that this will ease their debt problem. But every time you apply for credit you leave a record of the application on your credit reference file. Too many applications will be a warning for lenders that you are struggling to cope with your financial situation.
Depending on your circumstances you have 2 choices when applying for a bad credit loan. A secured loan is the preference of most lenders as they will have security in the collateral you pledge to recover their money if you default. You will get a better interest rate with a secured loan, but you must understand the risk of losing you asset. For an unsecured loan, the borrower is charged a higher rate of interest because there is no guarantee that the loan will be repaid. If you want to get the lowest rates available, it is advisable to carry out research.The easiest way to carry this out is online where lenders can be found that will arrange bad credit loans for individuals who have court judgments against them for previous bad debt repayment. Having said that, there are not too many of these companies willing to provide a loan under these circumstances so the chances are that the only way to find one online and make an application online.
