Old unpaid loans are surely a huge burden on your finances but what is worse is that begin to have tags like late payments, arrears, defaults or CCJs, which results in having a damaged payment history. Bad debt loans are specifically meant for such people, enabling them to borrow the money for varied uses and also to repair their rating after learning from past mistakes.
Because of a faulty credit history of the applicants, these loans carry high risks for the lenders as the borrower is likely to make old mistakes again. Hence, before approving the applicants, their repayment capability is checked out and an amount is issued to them accordingly. Past employment record, existing income and bank statements of the borrower play crucial role in getting the loan.
Prior to applying for bad debt loans, make sure that your credit report has no errors. Take out the report from the reputed agencies and report the errors to them. A little improved rating will helps in borrowing the money at easier terms.
If you are a homeowner, bad debt loans are accessible in secured or unsecured options. The secured loan requires you to pledge a property for collateral, with the advantage of borrowing £5000 to £75000 at low rate of interest. To lower the monthly outgoings for the installments, you can pick up the amount for its repayment in say 25 years or earlier. You can also find out smaller amount in the range of £3000 to £25000 without collateral as unsecured loan, but interest rate will be little higher and its repayment will be in short-term of few months to 10 years. For tenants or non-homeowners, the unsecured loan is the only option.
These loans can be used for varied purposes like getting rid of old loans, home improvements, buying a car, wedding, holiday tour etc. As you repay the installments, your credit rating will move higher.
Do not settle without first comparing the lenders for their interest rates and additional costs. Bad debt loans should be searched well for a suitable deal, as you must be able to make the repayments in timely manner.
Peter Darwin has done his masters in Business Administration from Oxford university and is currently assisting Bad Debt Unsecured Loan as a finance specialist. For more information related to Bad debt loans , Unsecured personal loan, Bad debt tenant loan, Bad Debt Unsecured Loan please visit http://www.baddebtunsecuredloan.co.uk/