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Adverse Credit Loan
If you have a bad credit history you have probably found it’s hard to get a loan, in fact the
only type that you may be able to get is a bad credit loan. Whether it’s for a home, a car,
a personal unsecured or secured loan, people with bad credit typically have a harder time
finding a lender and end up paying higher interest rates.
Apply today via our secure online form for a fast no obligation loan quote even if you have a
bad credit history.
What Is A Credit History?
Your credit history is a record of all past financial commitments and your pattern of repayment,
as well as an overall look at your total debt load. Credit reference agencies use this information
to assess your credit worthiness and assign a credit score. Lenders then use the credit score as
a factor in deciding whether or not to underwrite your loan.
How Did I Get A Bad Credit History?
* Anytime you are late making a payment,
* miss a payment,
* default on a debt,
* or fail to otherwise fulfil a financial contract or commitment, this information is reported to credit reference agencies.
The more of these reports the agencies receive, the lower your credit score and the harder it
is to find a loan. Other information that can cause a red flag in your credit report includes
frequent changes of job or address, or one or more County Court Judgements against you.
So Will I Be Able To Get A Loan?
The good news is that there are many lenders who specialise in working with people who have a
bad credit history. You will likely pay a higher interest rate than someone with a good credit
history, and the amount available for you to borrow will probably be lower. However, once
you’ve secured a bad credit loan, over time you can improve your credit score by showing regular, responsible repayment of the loan.
What Types Of Bad Credit Loans Are Available?
Bad credit loans will fall into one of two categories – secured or unsecured.
* Secured loans involve using something of significant value as collateral for the loan,
usually your house. The lender will determine the loan amount and interest rate based factors
such as your credit score, the value of your home, and your overall debt load. Each lender
weights these factors differently and some consider other factors as well, so it’s important
check with each lender about their specific criteria.
* Unsecured, personal loans, bad credit loans, however, are among the most difficult to get. They represent a
very high level of risk for the lender, so they are naturally much more cautious about underwriting
this type of loan. If you need an unsecured loan, though, don’t lose heart because while it is
difficult to obtain one, it is possible. Look for lenders who specialise in this type of loan;
they are sometimes referred to as sub-prime lenders.
How Do I Find The Bad Credit Loan That’s Right For Me?
Do some research before you submit any loan applications. Check out several lenders, ask about their interest rates and loan terms, and find out more about their loan process. Be careful, though, not to submit a flurry of applications in a short period of time. Activity such as this can actually make your credit rating worse, so make sure you learn as much as possible about each lender’s program before deciding whether or not to complete an application.
You can also work with an independent loan broker to help determine which lenders have programs that fit your individual circumstances.
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