Thinking of applying for bad credit loans online?
There are many different reasons why you may be suffering from bad credit, issues ranging from missing a certain payment, going overdrawn on your bank account or even simply failing to pay a bill on time. In the digital age that we live in, it seems that nothing goes undetected when it comes to late payments, especially with credit history companies such as Experian, every little detail regarding your credit history is logged and accessible to many UK direct lenders.
People with bad credit are often turned away numerous times when it comes to applying for a loan or any form of finance. This is because the majority of UK loans lenders will base their decision purely on your credit history. So if you have previously defaulted on a bill payment, this will scare many lenders off from giving you a loan in the fear that you will default on a loan repayment and fail to repay the full cost of your loan back in the agreed time.
Only a small handful of lenders will offer bad credit loans to people with a poor credit history. Bad credit loans are loans that are specifically suited to people with bad credit, these types of loans may come with a slightly higher interest rate and more strict terms and conditions should you fail to make a payment. Bad credit loans direct lenders will also review your credit history file to see what borrowing history that you have had and like many other payday loans direct lenders, they may feel that you can not realistically keep up with the monthly repayments and may choose to reject your loan application.
There are a number of things that bad credit loans lenders will look for when it comes to assessing your application, these include:
- Your monthly income and expenditure – If a lender feels that you have a consistent form of income and enough disposable cash left at the end of each month to repay loan repayments, this could improve your chances of getting a loan for bad credit.
- Your current employment status and history – If you have a bad credit history and are also unemployed, applying for bad credit loans is probably not the correct decision. Lenders will likely reject your loan application due to the fact that you are currently unemployed without a source of income and therefore will not be able to afford the loan repayments.
- Your Credit History – If you are specifically applying for a bad credit loan, the chances are a direct lender will already know that you have a bad credit history, even before they have reviewed your credit file. Although all direct lenders need to perform a credit check, this does not mean that given your bad credit score your application will be rejected. Instead a bad credit loans direct lenders may choose to offer you a loan or alternative financial products suited for your needs.
What are bad credit loans and are they suitable for me?
If you have a bad credit history then a bad credit loan is probably the likeliest option for you to receive additional funds. Bad credit loans are specifically designed for people with a poor credit history and are only provided by a number of lenders. Bad credit payday loans usually come with a slightly higher interest rate and repayment terms due to the risk of a lender loosing their money if someone is unable to repay their loan.
Although the interest rate on a number of bad credit loans may be higher than the traditional payday loan, the cost of these types of loans can usually be spread out over a longer period of time in order to reduce the monthly payments. By spreading out the cost of your loan by another couple of months, the monthly repayment fees will also get smaller, meaning that they become more manageable for people to pay back.
As the name suggests, bad credit loans are a source of finance for people suffering with a poor credit history who are desperately in need of some additional funds. Only you will know if bad credit loans are a suitable option, there are many different types of financial products available on the market designed for people with poor credit, comparing the different products to find the best available deal for you is something that we will always recommend.
Bad credit loans alternatives include products such as credit cards, secured loans, logbook loans and even remortgaging. Many direct lenders in the UK will offer bad credit loans with no guarantor, meaning that you will not need someone to act as a sort of back up for you should you fail to repay your loan. The disadvantages of a guarantor loan is that if you fail to repay your loan, the person that acted on your behalf to help you get the loan will be fully liable to repay any costs that you can not afford to payback.
Do you offer bad credit loans no credit check?
All UK direct lenders will need to perform a credit history check to see if you are eligible for a loan. If you are specifically applying for a bad credit loan, the lender will already know that you have a poor credit history, so carrying out a credit check will not uncover any shocking surprises to the lender. By law all UK bad credit loans lenders will need to carry out some form of credit history check. By doing this, it gives the lender a detailed overview of your borrowing history and also any debts that may be associated to you.
Payday pixie will not carry out any form of credit check that may harm your credit score, however if we match you to a lender it is likely that they will perform a full credit history check. The likelihood of finding a bad credit loan with no credit check are extremely slim due to the fact that no UK lender will give you money without being 100% sure that you can afford to repay the amount without falling further into debt. The only way to be 100% sure of this is to carry out a credit check.
Should I apply with a bad credit loans direct lender?
The process of applying for a loan can take you down a number of routes. The first option that we would recommend is to shop around for the loan or financial product that you are looking to take out. For example if you were looking for car insurance, the first place you would go to would be a financial comparison website such as Money Supermarket so you can clearly pick out the best deal for you. By using a comparison website you will be able to see which bad credit loans direct lender can give you the best deal and you will also be clearly shown all interest rates, fees and terms and conditions before you agree to take our the loan.
A bad credit loans direct lender is someone who will transfer you the money directly without the need to use a comparison website or broker. The benefit of applying directly with a lender is that you are only dealing with their company. However by applying directly with the lender you will not be able to see other deals that may be suitable for you. For example if you apply with one direct lender and agree to take out their loan, the chances are that another lender would have been able to offer you a better deal. We always recommend shopping around multiple lenders or using comparison websites to try and find the best deal.
How should I apply for bad credit payday loans?
Bad credit loans are a smaller type of loan that is usually borrowed for a shorter amount of time when compared to regular personal loans. Many payday lenders offer bad credit payday loans with the process of applying being very similar to all other loan options. For example an individual will still need to fill out an application form and undergo a credit history check to ensure that they are able to repay the full cost of the loan.
Payday loans for bad credit usually have a higher interest rate when compared to other loans. This is because payday loans in general typically have higher interest rates, as do bad credit loans. So when a payday loan and a bad credit loan are added together the results include higher interest rates and a stricter repayment process.
What happens if my bad credit loan application is rejected?
People with bad credit will often find that their online loan applications are constant being rejected. if your application is rejected, we may choose to display some other financial products that may be of interest to you. These products are all FCA licensed and approved and are designed to help you try and improve your credit score. Alternatively if you do not with to proceed with any of our recommendations you can apply with another direct lender, although applying again may affect your credit score and leave some form of credit footprint.
How can I improve my bad credit score?
There are many different ways to improve your credit score from paying off some of your existing debt to staying on top of monthly bills and repayments. There are a number of handy tools that can be used in order to help you improve your credit score, Experian are one of the leading credit score companies who will provide you with a full overview of what is damaging your credit score. By having a full overview of what is damaging your credit score, you are able to work towards improving it by focusing on the points highlighted in your credit file.
Here are 6 ways to improve your credit score