Loans with a bad credit rating – is it possible?
In today’s financial market there are loan companies willing to accept loan applications from those with a less than perfect credit rating. A bad credit rating will limit the loan products available and borrowers are unlikely to receive the benefits of competitive interest rates than that of their good credit counterparts – meaning that overall the loan will be more expensive.
It is important that if you do have a bad credit rating and are looking for a loan that you determine the cause of your bad credit rating. It may be due to lack of credit history, as in you have never borrowed in the past, or due to previous problems with debt repayments. If it is the latter, many loan companies are aware that peoples circumstances do change in terms of income, and are willing to approve a loan as long as it is proved that the borrower has sufficient income to afford the loan repayments.
Taking out a loan is a commitment, therefore to ensure that you do not fall into problems or further damage your credit file, you need to ensure that the loan repayments are repaid on time. Failure to repay your loan will cause debt problems, and will have a negative impact on your credit file which will affect all aspects of you obtaining credit.
It is worth noting that taking out a loan to cover living costs it is a sign that you are heading to debt problems. If you already have numerous debts that you are repaying each month, with little disposable income it is likely that you would benefit from a debt solution – it is not advised to take out any further credit but to seek advice from the Money Advice Service or your local Citizens Advice Bureau.