Loans in the UK for people with poor credit

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When you have poor credit in the UK, you may have a difficult time getting a loan. With the credit crunch, many lenders have found themselves in the position of losing money. Customers cannot make their monthly payments, and many loans have been defaulted on, losing the companies and banks a lot of cash on the defaulted loans. This in turn affects those who need a loan, because the standards and finance charges can be higher because of the companies worries over losing money. And when you have bad credit, it makes it that much harder to get a loan company to trust you.

A high credit score always makes it easier to get a loan, since low scores may make you seem like a bad credit risk to potential lenders. However, having poor credit will not automatically disqualify you from a loan, so if you are in need of one, you can always find a company willing to work with you.

Talk to your local bank to see what options you have available. Even if you have poor credit, you may still qualify for a loan, depending on how big of a loan you actually need. The downside to being approved for a loan when you have bad credit is that you will usually be charged higher finance fees for the loan because of your history. You can do your best to avoid this by taking out the smallest loan that you possibly can, and trying to pay it off quickly. Another option is to offer collateral for the loan, if you have any. This includes your home, property or other asset that you may be able to use to get a loan with poor credit. With collateral, you may get a higher loan if you need it, as well as a better interest rate. Just remember, if you default on the loan, the bank can and will eventually take the collateral you have put up so that they can pay the loan off with it.

Credit unions offer loans to their members, and at a generally better interest rate than a bank does. A credit union is a non-profit organization that is run and financed through it's members, and are affiliated with certain demographics or companies. Their primary goal is to provide responsible financial loans and services to their members. If you are a member of a credit union and would like to get a loan, you may be able to get one you need regardless of your credit history. While your interest rates may be a bit higher than you would pay with good credit, they may be substantially better than they would be with a bank loan.

Consider talking to your family or friends about your need for a loan. When you borrow money from someone that you know, they generally do not look into your current credit history. Instead, they will consider you based on personal factors, and whether or not they believe you will repay the loan. If you can, offer to set up a solid re-payment schedule, detailing how you plan to pay the loan back, in what increments, how often, and so forth. Most friends or family members will not charge you interest on your loan, which makes it easier to pay it back. However, if it makes the agreement easier, you may wish to offer to pay some interest on the loan to show good faith. Your lender may ask for a small amount of interest , which may be way less than what a traditional lending business would charge.

If you are working, you may be able to get a loan in the UK from your boss or place of employment. This is another situation where you will not be charged interest for the loan if you are given one, making it easier and faster to pay off. Talk to your boss about getting an advance from your paycheck if you just need a small loan. You may be able to simply pay it off within your next few paydays. If the loan you need is larger, you may have to talk to your financial department or boss to see if you can borrow the money from a personal account, or from the business account, and pay it back in instalments for a set period of paychecks. Not every company will even allow loans to be made to their employees, so this might not be a feasible option. However, those who work for smaller companies, family-owned businesses, or local companies may be able to negotiate the loan they need, especially if they are a long-time and valued employee.

Consider an unsecured loan. Those who have poor credit can look for loan companies that cater to individuals who do not have good credit. These companies are known as payday advances, cash advances, instalment loans, cash loans, and more. They operate both locally and online, and offer loan amounts anywhere from 100 to 1500 at a time. They are cash-until-payday loans, in which the borrower receives a certain amount of money that will then be due back on his or her next payday. There are finance fees involved with these loans, and unfortunately they are one of the highest out there. Since they are an unsecured loan, there is often no credit check involved, and no collateral collected, so these loans are considered high risk. However, they are relatively easy to get. They require only a couple of things- that the borrower be presently employed and have a checking account. Borrowers can apply online and be approved within minutes, and have cash direct deposited into their account within hours. It's a fast and easy way to get a loan with poor credit, but also risky.

There are ways to get a loan in the UK including small cash loans (these can have a very high interest rate because of the high risk to the lender) regardless of your credit score. Research your options carefully and find the best deal for your situation, and most of all, take the steps to get your credit score higher so that it's easier the next time around to get a loan.

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