Have you found yourself in a situation where you urgently need a fresh influx of money? Maybe a storm has recently left your home’s roof with a gaping hole to be patched up, or you are self-employed and an unexpected drop in revenue is seeing you struggling to make ends meet.
Whatever your reasons for seeking additional money quickly, you might have ruled out applying for a loan if you have a bad credit history.
The good news is that it is perfectly possible to source bad credit loan in the UK. However, you should take the following precautions before resorting to this strategy.
While loans for bad credit can provide necessary funds, they often come with higher interest rates, reflecting the increased risk. Carefully consider your ability to manage these costs before applying.
Decide whether you really need a loan at all
You may have accumulated bad credit as a result of financial difficulties in the past. Perhaps you have failed to make some payments on time or at all, or built up debt and defaulted on it? These are all examples of mishaps that would leave a mark on your credit file for years afterwards. This, in turn, can make it harder for you to get approved for a loan on attractive terms.
Although such adverse information eventually “slips off” a person’s credit file with the passing of time, you might not be able to wait for years and years before applying for a loan… or maybe you can. That’s because many periods of financial adversity can be overcome without a loan.
In your case, you might find that family members are happy to lend you some money to “tide you over”, or that you are able to free up savings across other aspects of your lifestyle. Basically, it can be useful to treat a loan as a last resort — and here are some insights as to why…
Before applying for a loan, exhaust all other options and ensure you have the means to repay without further compromising your financial situation. Responsible borrowing is crucial to avoid worsening your credit score.
Do what you can to enhance your credit rating
Our online credit broker CashCompare partners with various lenders that are willing to offer loans even to applicants with bad credit. These lenders know that your financial history alone shouldn’t be deemed the be-all and end-all of whether you can make repayments on time.
Nonetheless, as a lender will still naturally judge you to constitute a higher risk than someone else in the exact same situation but with a clean credit file, you will probably need to pay higher interest rates on a loan even if you are accepted for one.
The good news is that you can improve your chances of getting favourable loan terms by improving your credit rating beforehand. Such steps as registering on the electoral roll and meeting your existing financial obligations on time will help you accomplish exactly that, before you turn to us for help with finding loans for bad credit in the UK.
For personalized guidance on managing debt and improving your financial situation, consider consulting with a financial advisor.
As a credit broker, CashCompare connects you with a panel of lenders willing to consider applicants with bad credit, helping you find loan options that suit your current financial situation.
"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.