Can You Get a Loan With Bad Credit?
There are times when we all need a loan to get us through a rough patch; normally, we simply go to a bank or a loan company, fill out some forms and providing you meet the set criteria, you get your money in a few days. Easy enough.
However, with those who have bad credit, for whatever reason, it can be a whole different story. If you have declared bankruptcy, have CCJs, defaulted on a loan or have even been a victim of identity fraud, loan companies are hesitant to loan out large amounts of money.
What is available?
If you have a bad or no credit rating, there are a few options open to you in the way of guaranteed personal loans. These are specifically payday or cash advanced loans. A payday loan is where a company will loan you a small amount first, around £200 up to £1000, which you pay back with interest on the day that you get paid.
What amount can I get?
The amount of money will vary from applicant to applicant depending on their individual credit ratings, whether they have the funds to actually pay back the money and whether they fit into the set criteria the particular payday company adheres to.
Can I get a payday loan?
Payday or cash advance companies have minimum set standards for loaning out any amount of money. Applicants do need to meet these standards. Generally, the applicant has to show that they are financial stable, proving generally by means of payslips for at least two to three months. If you are applying for a loan of £1000, then you need to show that you earn at least £1000 each month.
Companies will take details of your monthly expenses, such as rent or mortgage, credit card payments, pre-existing loans etc, and then calculate how much you can easily afford once a credit check has been run on you. You should know that the more credit checks are run on you, your credit rating actually lowers.
Once your credit check has been completed and you fit all the criteria, the company will read you the terms and conditions of the loan and when and how it needs to be paid back.
What happens if I can’t pay it back?
Payment to the loan company is usually set up on a Direct Debit; if you know in advance that you cannot pay your payday loan on the set day all at once, you must contact your company and explain the details. They will then help you split the payment into something easily manageable; however, this means that they may not help you again in the future, plus they add on a hefty fee.
What happens once I pay back my loan?
If you have a bad credit rating but successfully pay back your payday loan on time, this will definitely help you improve your credit rating.
Loans are a great way of helping us through some difficult financial times, no matter whether we have good or bad credit scores. However, there are options available for those who have had an unfortunate history to help get you through and back on the road to a healthy credit rating.