Bad credit loans are like a welcome light at the end of a long dark tunnel for borrowers with a poor history of loan repayments.
For one thing, when they pick up one of these loans they will begin to learn how to be a good credit risk. In almost all cases, people who have felt the weight of a poor repayment history but have managed to get a loan never-the-less, will appreciate what they have and make fresh efforts to meet their repayments. They will re-programme how they think about loans. They’ll find new ways to make sure they always have the repayments ready on time.
New loan profile
Also, these loans will let the borrower build a totally new loan profile. When they successfully pay off the bad credit loan they will have established a new, risk-free status for themselves. And next time they need a loan, they will have moved that much further away from have been a bad credit risk.
And for another thing, they will be able to buy the thing they took the loan for. Perhaps their new home or car. Or the clothes they wanted, the holiday they needed, or the emergency medical operation their doctor advised.
Becoming easier to get
Getting a loan, from a history of bad credit, is a wonderful thing. And they are definitely becoming more and more easy to get. Talk with a good broker, or find one on the Internet, and you will probably be surprised at just how straightforward it can be.
These borrowing instruments have been around for a long time. They serve people with a poor official record of meeting repayments. If a person has a CCJ, for instance, a County Court Judgment against them, or an IVA, an Individual Voluntary Arrangement, with a finance company, then they will have a bad credit record. So will the people who have got into arrears, often through circumstances beyond their control. Or who have been declared bankrupt, or who have defaulted on a loan and been unable to repay anything more to the lender.
These loans are available
All these will count against you when you look for another loan to meet another emergency. But the good news is that these loans are available. There are lenders out there who make a speciality of finding people with bad credit histories who are currently actually good credit risks. These will be people whose circumstances or habits have changed since the days when they were bad credit risks.
Of course they are something of a risk to the lender, but he compensates for that by adjusting the fees and interest payments – making them higher than he would for conventional loans to people with good lending histories.
Secured and unsecured loans
People often manage to get bad credit loans on the strength of equity they have in property. It would not be uncommon in the UK for a bad credit loan to be given only if the borrower has 25 percent or more equity in their home. But there are also lenders who will give unsecured loans – albeit at a higher rate of interest, and perhaps with some additional fees. So you are able to apply for these loans with or without collateral, and with or without a requirement to put up an asset as security such as an expensive car or fine jewellery.
Go ahead and find a reputable broker who can help you step up confidently, with a realistic appraisal of your chances of securing the loan you need, regardless of the difficulties you might have had in making repayments in the past.