Types of Loans Available to People with Poor Credit Ratings in the UK

In case one is going through financial difficulties or is currently having past credit problems, it is possible to think that you will not qualify for a secured or personal loan. Bad credit loans is a term that is widely used and which is directed at people who have a poor credit history and who may be struggling in obtaining an ordinary loan at high street banks. These loans typically come with high rates of interest or demand that you provide something as security against the loan such as a house or a car.

In the context of university students, a Guarantor UK is the third party, such as a close relative or a parent based in the UK who acknowledges paying rent in case you as the international student fails to pay it. When you provide a UK Guarantor, the agency or landlord may take up permission in checking if the guarantor can pay rent through carrying out a credit check or checking on their annual income through the documents that the guarantor provides. The document that the guarantor signs set the legal obligation that he has in case the tenant gets into arrears.

The no guarantor loans or unsecured loans offer peace of mind and relief in a situation that is financially stressful or when you urgently need some money. The following are some of the reasons why the Guarantor UK loans have generally become popular in the country:

•Cash is readily available with easy terms of loans at anytime

•The unsecured loan is free from all kinds of fees

•These types of loans are available for all persons regardless of whether he is a tenant, home owner or bad credit holder

•These loan types are given as no guarantor loans for bad credit and are available to those people with a history of bad credit

•For the no guarantor loans, there is no need for credit verification

The following are some of the loans available to people with poor credit ratings in the UK

• Personal Loan:

Personal loans are some of the most common types of loans and entails borrowing an amount between £1,000 and £25,000 over a period of 1 to 7 years. There is a fixed rate of interest which then means that you will always be certain of the amount that you will be expected to repay. For instance, in case you borrow an amount of £5,000 at 40 % interest rate over a period of 3 years, the monthly repayments is £224, hence totaling the repayments to £8,054.

• Guarantor Loan:

Guarantor loans work in a similar way as personal loans. However, they also involve third party agreements and in most cases a friend or a family member who acts as the guarantor to ensure that the loan is repaid. The guarantor is held responsible in case payments are defaulted and in this case he pays it back. This could be the only way of borrowing in case you have a bad credit history.

• Homeowner Loan:

Though different from a personal loan, a homeowner loan is normally used for guaranteeing payments, hence enabling you to borrow a bigger sum of money. However, this means that a lender may reposes your home if you cannot afford to repay it. The rates of interest vary and the period of repayment may get to 25 years.

• Instalment Loan:

A guarantor or personal loan is also known as an instalment loan since you repay a stipulated amount of money every month over a specified time period.

• Logbook Loan:

Through this loan, the borrowing is secured against the car. If you therefore fail to repay the loan, the lender may take away the car in settling the debt.

The major advantage of bad credit is that you are indeed able to borrow money, which you would not be able to do due to your credit history. Another benefit is that having a loan may indeed help people with bad credit rating in repairing their credit status. This is due to the fact that if payments are always made on time, this proves that you can responsibly manage your money.

Eliminate Debt with Bad Credit Loan

People nowadays are overwhelmed with lots debt problems as well as bad credit. To overcome this kind of situation, there is a bad credit loan that you can acquire. Many people start to discover bad credit loan as one of the most effective ways to solve their debt problem. Actually, there are different kinds of bad credit loans such home loan, auto loan, personal loan and bad credit loans.

The best answer to this problem is by getting your own bad credit loan. This is the right opportunity if you want to get rid of your debt efficiently, permanently and without any lasting damage. You have to know that the monthly payment is always constant and this will make it very easy for you to organize your monthly budget. The same as credit card, it also involve as non-revolving credit. It only means that the interest rate as well as the term of your bad credit loan will be fixed.

It is good to know that the credit company is not interested in what you are going to use the money for.  Their only main concern is whether the borrower can repay the loan at a definite time and date. People with bad credit are higher risk for lenders. People with bad credit should locate for specialist lenders who give away loan for people with bad credit.

You can also use debt counselling services, this will give you a chance to be at the negotiating table with the lender and discuss important details about acquiring bad credit loan. It is very important for you to weight down all possible options as well as understand the whole loan. You need to talk to a specialist right before finalizing a specific loan. If you will not do this step, you may not be successful in looking for a bad credit loan that is suitable for your needs. You can visit  Credit Poor for more information that you truly need.

If you are suffering from bad credit, then there is a need for you to pay higher interest rates. It will increase the overall cost of your loan. However, if you still choose to go on with a bad credit loan, then you need to comply with all the terms within the loan and make all needed repayment on time. If you will do all necessary actions and repayment on time, then within three years’ time you will not be termed as “bad credit”. Another possible option is for you to merge all your debts.

If you will follow this tip, you do not have to write ten different checks in ten different companies. You will be able to consolidate all of your bills into a single payment with lower interest rates. With the use of consolidation, it will be very easy for you to lower your monthly bill. You can also make regular and on-time payment every month. If you will continue to make an on time payment, you will surely eliminate as well as improve your credit history. If you will just use a bad credit loan wiser and effectively, you can surely eliminate the debt on your side and continue to live a new and fresh life free from any debt.