With over 400,000 adverts broadcast on network television during 2013, we strongly believe that last year was the year of the ‘bad credit loan’.
With a wide variety of loans available, some, including payday loans, have received a lot of bad publicity, however others, such as guarantor loans, are rapidly gaining credibility with borrowers throughout the UK.
Banks are choosier now than they ever have been regarding who they are prepared to lend to. Whereas just a few years ago, lenders were seemingly falling over each other to offer great deals to their customers, possession of a bad credit rating, or even no credit rating at all, is often enough to ensure that the bank’s ‘computer says no!’
The reasons are nearly always immaterial, it does not matter if you had the stuffing knocked from your credit rating due to financial problems, or if you still live at home with your parents and have not had the opportunity to establish a credit history, anything less than a perfect credit rating will ensure that banks view you as a high risk borrower.
The problems associated with becoming trapped in the ‘payday loan cycle’ are well documented. Rather than stating the obvious about what happens when the situation becomes out of control, information of far greater use would be advice relating to how to remove yourself from the situation or even better, avoid entering it altogether.
Without doubt, escalating payday loan debt is a serious matter and all too often people believe the only way out is to repay one payday loan with another. This is never the correct option because all this will succeed in doing is prolonging the agony, it is therefore far more important to identify a method of nipping this problem in the bud.
Rising bills should never be ignored. It is all too easy to keep spending on your credit card whilst making just the minimum repayment each month. This can very quickly result in an outstanding balance which can make your hair stand on end and a significant problem in regards to how to repay it.
Burying your head in the sand will ultimately cause you more problems because as your debt begins to mount, your credit rating will begin to move the opposite direction and because your credit rating can be checked by all companies to see if you have a poor credit history, whether you want a mortgage or finance for a new cooker, there is no hiding place from debt.
Doorstep Loans or ‘Home Credit’ are terms which relate to a type of loan which is brought directly to your home address with repayments being collected directly from your home as well
The term ‘bad credit loan’ covers a wide variety of specific loans targeted at anyone who has a poor credit history and would therefore have difficulty applying for a standard loan at a High Street bank.
A recent report stated that there were over 400,000 TV adverts broadcast during 2013 advertising some type of bad credit loan and while of course, they all portrayed their particular product as being the best one available, the truth is there is nearly always a catch.
Everyone loves to have their say about bad credit loans. Despite the fact that they offer the only viable form of available credit for many people, the bad publicity is there lurking around every corner.
Is this overwhelming bad publicity fair though? Whilst loans such as payday loans have some obvious drawbacks (they can be eye-wateringly expensive!), other variations of bad credit loan such as a guarantor loan continue to fly under the radar despite the fact that they offer few of the unavoidable drawbacks of many of its bad credit counterparts.
Although guarantor loans offer one of the more traditional methods of borrowing, there are still significant gaps in the public knowledge regarding how they work and what they offer. To help fill the information void, we have drawn up a list of five little known facts that we feel should be shouted from the rooftop.