You have a bad credit score and you need extra cash flow, now what? What do you do? If this sounds like you and you feel at a loss, don’t worry, you are not alone. Thousands of people in the UK are struggling with the very same problem. Getting a handle on your finances might seem tough when the cost of living rises, unexpected expenses crop up, or when you have a new venture that you wish to fund. Obviously, the first step for those with a poor credit score is to look for a no credit check loan or a bad credit loan.
Avoid the Stress & Rejection of Traditional Bank Loans
Borrowing money when you have a bad credit score isn’t easy. If you approach regular banks and lending institutions, you will almost always be turned down on the basis of bad credit score. This is why bad credit loans and no credit check loans are available to those with a less than perfect credit score. You will still be faced with tough challenges though.
You will encounter a plethora of lenders offering easy approvals, and in most cases, it can be hard to determine which offers are worth it in the end and which aren’t. Choosing the wrong no credit check loan could negatively impact on your finances, so it is best to do a bit of homework before deciding on which loan is best for you.
With that in mind, here are five tips to consider when choosing a no credit check loan:
Suss out the annual interest rate on offer. The interest rate on a no credit check loan is always going to be a bit higher than any other personal loan option, but you still need to be wary. The last thing you want is to jump at a loan because you feel desperate and then get trapped into an ongoing cycle of debt with excessive interest rates attached. Choosing the wrong no credit check loan could end up costing you thousands of pounds in interest. Make sure that you compare each lenders interest rate.
Consider the loan repayment period and terms. Make sure that they are fair and easy to meet with. Choose a lender with realistic terms. A no credit check loan should be paid off with ease. You don’t want to be tied into a long-term contract. The monthly repayments need to be something that you can actually afford. Work out your budget and be realistic about whether or not you will afford the proposed monthly installments. To ensure that you improve your credit score while paying off your loan, make sure that you pay the outstanding amount (or a little more) each month on time and make sure that your credit report has no discrepancies. Never sign a loan contract simply because you feel desperate or don’t think you will get another offer. Always take your time.
Look for quick online or telephone approvals. Loan applications can usually be processed quickly and outcomes are provided in a matter of minutes, but this isn’t always the case with all lenders. Choose a lender that offers convenience and time-saving. You should be able to apply for the loan online or by telephone — there’s no need in this day and age to physically visit the lender. Traditional loans unfortunately can take days or weeks to be approved, which simply adds to the stress of the situation. Often after all the waiting and lengthy approval processes with the bank, you can still be turned away!
Find lenders that put your financial situation ahead of your score. Choose a lender that takes a broad look at your financial situation and how you handle your credit rather than simply basing their decision on your credit score. While your credit score plays an important role, no credit check loans aren’t strictly based on that score. The right lender for you will consider your current income, your current handling of your outstanding credit, affordability and so on. You are more likely to receive an approval from a lender with this particular type of approach to applications.
Give preference to lenders offering loans that amortize. An amortizing loan is one that doesn’t have a flat interest rate charged. As you pay off the principal debt, you will accrue less interest over time. By paying this loan off earlier than the agreed schedule, you can save money. With this type of loan, every payment you make goes towards the interest as well as the principal debt amount. This means that you won’t get stuck in a cycle of debt merely paying off the interest accrued. Many people find themselves stuck in a revolving credit loan. It can feel like you are making no headway on your debt, because you actually aren’t!
Things to Consider Before Applying
When applying for no credit check loans it is important to take your current financial situation into consideration. Ensure that you can afford to take on the extra debt and set a personal strategy in place to ensure that the loan is managed responsibly.
Photo Credit: stock photo