Bad credit score reflects your past credit Karma. However you need not live under the burden of past credit mistakes. Be it urgent cash hassle or a looming deadline for repaying loan instalments and credit bills, you should never haste the decision to borrow additional loans.
Though with the development of FinTech market, it has become easier than ever to find loans for bad credit in the UK, however amidst the plethora of loan options are floating fake deals from unscrupulous lenders. You need to thus use caution and know about the common myths and mistakes of borrowing loans with bad credit.
Payday loans come as a paradise to anyone who seeks swift and hassle free loans with low loan eligibility. From low credit score to irregular credit history, to lack of collateral and guarantor, none would make you ineligible for small cash advance loans up till your next payday. However payday loans come with high interest rate. A hasty decision to borrow a loan with high rate could be one of the biggest borrowing mistakes if you fail to repay the loan on time. You must refrain from borrowing payday loans if you could avail a cheaper short term loan.
Owing to poor credit rating a lot of borrowers believe that credit check is the hassle for borrowing bad credit loans, wherein it is absolutely not the case. With poor credit it becomes all the more important to borrow loans after a credit check.
When lenders assess your credit profile, they basically evaluate your affordability index. According to FCA guidelines, it is a must to conduct credit check before extending loans to borrowers. The financial watchdog has directed that one must not only borrow from regulated lenders but also according to the affordability of loan. The credit check helps a lender to be assured of timely repayment. With success of repayment, the borrower can also be more confident of improvement of their credit health.
In order to make the best use of available credit deals, it is important to assess your repayment capacity. A lot of borrowers either borrow too high or too low; both could be detrimental to your credit position. You must try to assess your needs and repayment capacity carefully. It would help you know if you could afford the loan or not. A well thought out loan is easy to manage and repay.
Falling prey to low APR ads
Online adverts on low APR for bad credit could be misleading. A lender is never liable to offer you the rate of APR according to their Ad. You must thus carefully read the documents and know clearly about the total cost of all. A lender is only liable to provide the low rate to 51 per cent of borrowers. Herein they have complete choice to choose the prospect for the same. With bad credit it is highly unlikely that you may get eligible for low rate. It is thus recommended to use professional loan advice before you contact lenders. A regulated loan broker can help you gain access to direct deals; you can compare and choose the best deal.