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How to Compare Bad Credit Loans
A bad credit history can be a real burden to your future prospects and put a halt to any speculative plans that require a bit of capital up front.
Fortunately, bad credit loans are available to help people get the money they need and help mend their bruised credit rating.
Bad credit loans are good for...
- A poor financial past
If you know you have a bad credit history don't start applying to standard unsecured/secured loans because you will almost certainly be rejected, which will only add further damage to your credit score.
If you are unsure about your credit status, then don't test the water by dispersing random applications in the hope of approval. Instead, get online and look up one of the many agencies offering free credit reports. Perhaps the most widely known of these is CreditExpert.co.uk by Experian, who currently offer a free credit report and 30 day monitoring service.
Once you are clear where you stand you can begin looking at the types of company that may be willing to offer you a loan.
- Mending your credit score
Once you've been approved and began paying off your new loan in a timely fashion, your credit score will start to improve, which will help you with future applications to other loans and credit cards.
Bad credit loans are unsuitable for...
- Unstable income
In and out of jobs? Struggling to pay the bills? Mortgage arrears?
If any of the above sound familiar to you it would be ill advised to take on more debt. Bad credit loans are designed for people trying to recover from a bad credit score rather than repay their current debts with a different one.
If your finances are in crisis look at our section on debt consolidation loans for help.
Look for:
- The best APR & Repayment period
Bad credit loans will offer less competitive rates of interest and longer repayment periods than a standard secured/unsecured loan. This combo can easily lead to a hefty interest payback on your original borrowing.
Try to find the best APR available (all rates quotes here are the typical rates offered to the majority of customers) and use our loan calculator to determine the minimum period you could comfortably afford to repay the loan in.
Watch out for:
- Submitting too many applications
Every time you are rejected from a loan or credit card application, your credit score takes a blow. Rejection from a few loans in quick succession will hinder your chances of being approved for any future applications.
Try to gather as much information from the lender as possible, so you can not only be clued up as to which loan suits you best, but also discover which lenders are more likely to accept you.
Don't forget:
- Credit cards
If you are only after a small amount of money and have a poor credit rating, it may be worth considering a bad credit rating credit card. There will be more flexibility with when and how much you pay each month and the lender will often add points to your credit rating for prompt repayment.
Compare bad credit loans
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