When your credit history is less than perfect but you need to borrow some money, then if you compare bad credit loans you will find there are a number of companies that will lend to people with bad credit, and some which specialise in it. Before signing on any dotted lines it is a good idea to check out the small print and compare bad credit loans from a number of lenders.
Before a loan provider agrees whether or not to allow an applicant to take out a loan, they do a credit check on them to see how they have dealt with credit in the past, and use this information to determine whether or not to lend to them, and if so, at what interest rate.
Why compare bad credit loans?
It is important to compare bad credit loans before taking one out to ensure that you get the best deal possible. The rates offered to you will depend on your circumstances and requirements such as:
- How much you want to borrow
- Over what period.
- If you need a homeowner loan
While you will not have access to the rates that someone with a good credit history might, there is still a great variation in the rates available to you, so compare bad credit loans to avoid paying more than you have to.
The loans available to someone with a poor credit history include adverse credit tenant loans or adverse credit homeowner loans. The latter is obviously only available if you own your own home, and usually offers lower interest rates.
If you take out a homeowner loan, then lenders are usually willing to lend you more money, over a longer period and at a lower rate due to the fact that you are using your home as security, so are less likely to default on your payments and they can recoup their losses if you do.
But of course, the advantage of a lower rate comes with the disadvantage that if you do default, you could lose your home. With an unsecured loan, you do not have to put up any surety for the loan, but you could still be taken to court if you get into arrears.
Unsecured loans are generally taken out over a shorter period than secured loans, and make up about 90 per cent of the loan market. They also have a fixed rate, so you know how much you will end up repaying and how long it will take, where as secured loans can have a variable interest rate, so if it goes up then you could end up paying back more than you bargained for, and it could take longer.
How to compare bad credit loans?
Comparing bad credit loans is easy. Decide which is right for you – a bad credit homeowner loan or a bad credit unsecured loan - and then simply click on the link below and fill in the quick form - a broker will call you back to talk about which loans are available for you and provide you with quotes from a number of leading UK loan providers to help you get the best possible deal.
Advantages of comparing bad credit loans
- Find the best deal
- Rebuild your credit history by keeping up with repayments
- Pay it back faster by not paying as much interest
You should only borrow as much as you need and avoid missing payments, as this could damage your credit rating further. If you keep up with repayments, this will improve your credit score and you will be eligible to apply for more competitive loans in the future.