A long term loan is a long term responsibility. Whether you need a high ticket loan for education, building a home, working on a business plan or to consolidate your debts, it would require a lot of careful thought out before you apply for a loan.
As varied is the wealth distribution, as are the credit rating differences. Not all households in the UK or anywhere on the globe possess high credit score. There are hundreds and thousands of borrowers seeking bad credit loans in the UK.
Let’s find out what are the major challenges of borrowing with bad credit rating.
- No Eligibility: You need to have an excellent credit score like something above 750 points to be eligible for long term loans from main street lenders. For, long term loans also suggest long term risk for the lender. Thus anyone with low score shall either improve their score before applying for a long term loan or resort to FinTech players for hassle free processing despite low score.
- High Rate of Interest: With low score you would be charged very high interest rate from main street lender. A private lender would also charge premium for offering a loan with risky profile. It is thus important to compare the deals before you choose one. You can consider using a broker’s advice to get introduced to available loans in the UK.
- Loan Security: A lot of lenders look out for loan guarantor or collateral to secure the repayment of loans. However with poor rating it is a cache 22 situation to search for a guarantor.
With all these challenges searching for long term loans with no guarantor support could be a tricky situation. However using some financial prudence you can make a smart borrowing decision.
When you need long term personal loan for bad credit, it is important to clearly define the purpose of loan. Whether you need funds for a business plan or personal matters, you must know how you are going to use the funds. This would help you better channelise your funds. Being unsecured loans, the rate of interest would be high and thus it is recommended to opt for affordable repayment plan. You must be well prepared to deal with loan repayment or else it would be difficult to manage later on.
Being a homeowner you can avail cheaper high ticket loans despite bad credit. Be it home repair, home extension or debt consolidation– it is more hassle free to borrow as a homeowner. You can avail up to 80 per cent of Home Equity you own. In case you need an unsecured loans, the amount eligibility may vary. Being a homeowner however you would score above the tenants for loan.
Based on your circumstances and loan requirements, you can apply online for a loan with the help of a broker. They will share the available deals online. You can compare and choose the best match according to affordability.