Top Tips for Getting Bad Credit Personal Loans

2  Be Sure That You Can Afford the Repayments

It is worth spending a little time working out exactly how much you can afford to repay.  Failing to make repayments on time will damage your credit further.  You can print off forms to help you to work out your income and your current outgoings.  Remember to take into account the possibility of some unexpected expenses e.g. a car repair bill and expenses which do not occur each month e.g. Christmas.

3 Check Out Your Credit

Lenders will use a credit reference agency such as Experien to check your credit record.  It can be helpful to check what it says before you apply for loans. Try their free 30 day trial. There is also Equifax.

4 Choose Between a Secured and an Unsecured Loan

If you are offered a secured loan, a lender will take security over some of your property – typically your house or flat.  If your home is already the subject of a mortgage, the lender may take a second charge.  A second charge is a form of security taken in addition to that taken by your mortgage company.

If you fail to pay the amounts due to a lender who has security over your house or flat, the lender may then have the option to repossess your property.

Taking out an unsecured loan does not necessarily protect you against losing your house if you fail to keep up with the payments. The lender does not, however,  acquire a security interest in your home when you take our your loan.

In deciding between the two options, you will want to take into account any differences in interest rates.  Interest rates for secured loans are generally less than rates for unsecured loans.

If you are looking for a secured loan, one option which could work for you is to consider asking your current mortgage company to increase your mortgage.  Be aware, however, that if you spread your repayments for your new borrowings over a long period as part of your mortgage, the total interest paid may be very high when compared to a short term loan.

5 Decide Who to Approach

Do not apply for lots of loans.  Making multiple applications can, in itself, damage your credit status further.

Instead check that you are able to comply with conditions set by a lender before you apply for a loan.  Some lenders, for example, require a minimum level of earnings.  If your earnings are less than the stated minimum level then there is little point in applying.

The other thing to check is the typical APR which the lender offers.  It does not mean that you will be offered that exact rate but a lender with a very high typical APR may be less attractive to you than one with a much lower APR.

Companies which are prepared to consider borrowers with bad credit include:

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

6 Charges

Make sure that you fully understand all of the charges e.g. set-up fees.

If you are taking out a secured loan, you may have to pay to have your property valued.

7 Flexibility

If you have some spare cash you might want to pay off a little extra of your loan some months.  Alternatively, you could want to repay the whole loan early.  If you think that this is a possibility, then ask about the flexibility on your loan repayments.  Some companies will allow you to increase payments with no charge – with others you will incur early repayment charges.

Bad Credit Personal Loans

Companies which are prepared to consider borrowers with bad credit include:

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