Bad times are as much the reality of life as the good times. No one plans for poor credit rating. Nevertheless, once ridden by financial emergencies and low credit worth, you are required to look out for “ways” to borrow loans. Conventional lenders stay away from borrowers with poor credit and any kind of haste could turn out to be a total waste.
When you need an emergency loan with bad credit in the UK, it is recommended to have a pre -borrowing assessment. You must evaluate your borrowing capacity before availing the loan. Seek an answer to the following questions before applying:
1. How much I need?
Irrespective of what is available to you, know clearly how much you need. Make a list of impending expenses or immediate causes you need funds for. This evaluation would help you borrow according to your needs. Whatever be a deal, do not borrow more than what you required. Be firm to borrow moderately. Bad credit loans could be too taxing to manage. Sticking to small loans help you stay afloat despite the credit hassles.
2. What is the best option?
Always compare and choose the best deal. You must ensure that you borrow moderately for a short period at the not very high rate. For example, payday loans would cost you more than instalment loans for bad credit.
3. Can I get a cheaper loan?
Look for factors that can help you leverage the cost of the loan. For example, being a homeowner, you can avail a lower interest rate on loan despite the bad history. You need to carefully assess all the available options and choose the one according to your credit repayment capacity. Using collateral or guarantor you can avail cheaper bad credit loans. Thus, always ensure you get the best price available.
4. Can I afford the loan?
Pull out your free credit report and assess your loan repayment capacity. You should always ensure that you pick a loan that offers ease of repayment to you. Choose the instalment that is easy to repay. This helps you stay on track despite temporary financial hassles.
5. Do I have a repayment plan?
Bad credit rating indicates poor management of your loans and credit profile. Thus, when you go for additional loans it is important to have a repayment plan at the place. Make sure you have a strict budget to check the expenditures. You need to have a back up to repay the loan. This kind of planning would ensure timely repayment of the loan every time.
The pointers above can be used as 5 point pre-assessment of a loan deal. With the little manoeuvring, you can ensure better credit rating in future.