Getting Loans For Bad Credit Within The UK
Even for the very small things, getting a loan with bad credit within the UK can seem almost impossible. However, when extreme need strikes, it can be imperative that you get a loan to make it through to the next pay cycle. So, while it won't be easy, it is possible to get a loan with less than stellar credit. You have to willing to jump through some hoops for sure, but it may be worth it in the end.
The first thing to understand is that these loans come with around 20% interest on them. This is a much larger number than other loans, and is not likely to go down by much. Depending on how bad your credit is, this number may go up to 30% or more. However, if you can take a loan that you can pay back before the interest capitalizes this won't be a problem.
Keep in mind that collectors will be much more aggressive when you already have really bad credit. Not honouring these loans can mean the loss of your home, your possessions, or your bank account being frozen. This is why you need to be completely sure you need one of these loans before you take them out. However, because creditors will be looking at your loans, they can also help build up your credit as well.
Most loans for bad credit will not be got by going into a bank. Most banks will not deal with people who do not meet their criteria. This means that you will have to deal with unsecured loans, or loans through third parties. This is part of the reason that these loans cost so much.
Many of these loans will be found online or through companies that specialize in pay day loans. Online decisions are very common, and will likely be the way that a loan is procured. This is because information about your credit is available online, and companies are better easier to offer high risk loans when they don't have to worry about losing a physical space.
Online loans also come with the added benefit of all paperwork remaining online. This makes it impossible to misplace the paperwork, lose the information that you need, or forget to pay the loan. Reminders will usually be sent through e-mail but may be sent to your mobile via text or voice. You will often need a bank with online access for payment to be directly transferred from in order to apply.
You will likely need some form of collateral, considering you do have a bad credit rating, the most common of which is a home. If you do not pay on your loans they will take this away and use it to pay off your loans. You will need to own this or have the permission of the individual who does. This means that you can't apply with your moms house or the house of a friend.
Often these bad credit loans will have a large fee attached to them when you apply. This fee will either be due with your first payment or will come out in installments. Checking around to different companies may get you an arrangement that is more satisfactory. However, as the UK only has a few companies, you may not be able to get the perfect arrangement.
Payments will usually be due once a month, but some companies will require weekly or fort-nightly payment depending on your pay packet schedule. Knowing when they are due can save a lot of stress when you look at your bank account. Usually this will be a set day, but some private lenders may set an arrangement for a specific day of the week.
It is always better to try and pay off the loan early. However, there may be a fee for trying to do this with these types of loans. If there is such a fee, make sure that the payment is big enough to justify paying the fee as well. Saving up a few months worth of extras and paying on the loan can sometimes work better than paying the extra every month.
Getting bad credit loans will be a bit of a hassle, but if it is the only answer going about it in a smart way will save money and heartache.