The prevailing economic situation in the UK is a reflection of what is going on globally. There is a tightening of individual incomes as prices rise in the backdrop of a slow global economy. In the UK, things are tougher due to economic uncertainties among other internal issues. According to the Office for National Statistics (ONS), the average household owes over £12,887, and this excludes mortgages. The levels of default are high, with levels reflecting those of 2008.
In this financial environment, most household owners find themselves grappling with bad credit ratings. This situation is precipitated by late loan repayment, especially for credit card debt, failure to repay, notices from collection agencies, bankruptcy and asset repossession. In an ordinary situation, getting a personal loan is tough and if you have a poor credit rating, things are even tougher. Banks and credit unions are wary of lending to high-risk customers and when they do, their loans are very expensive.
Fortunately, you can now take advantage of a bad credit loan from a licensed direct lender to sort out your emergencies. These loans are given despite your low credit score. This is a great reprieve for millions of household owners who have been turned away by their banks. Bad credit loans are now popular because they are easy to access and they don’t involve rigorous credit checks.
As long as you are a UK resident and you have a stable source of income, it is now possible to access emergency credit from an online lender. While these loans come as a Godsend, you have to remember the following:
- Manage your credit score – Most consumers don’t know they can correct inaccuracies in their credit reports. You might be missing out on cheaper loans due to inaccurate information on your credit report. Before borrowing, check your credit report, report any errors, and start paying your bills on time and close bank accounts that youno longer in use.
- Borrow only what you need – Most consumers fall into debt due to poor borrowing habits. Now that you have a new line of credit, you should not fall back to your poor financial habits. As such, only borrow the amount needed to sort out an emergency.
- Compare the interest rates – Due to your poor credit history, you are considered a high risk by financial institutions. For this reason, the interest rates are higher and it is advisable to compare as many lenders as possible.
- Create a new financial strategy – Now that you are borrowing more money, make sure you tweak your budget to reflect the repayment.Adjustments must be made to ensure your new loan is repaid on time.
- Use the best loan company: –An established direct lender will have the resources to provide loans even for consumers with bad credit. It is advisable to go for a reputable loan company that offers flexible loan products based on your income and financial needs. Such lenders are easier to deal with and you can establish a long-term working relationship with them.
Bad credit loans are easy to access, flexible and they can be used to sort out any financial emergency. Go ahead and compare rates offered by different UK lenders.
Janelle Milligan is a financial expert with over 20 years’ experience in the industry. She also comments on topical issues such as bad credit loan in the UK. Janelle lives with her family in London.