Credit Unsecured Loans | Bad Credit Loans Instant Decision

Credit Unsecured Loans | Bad Credit Loans Instant Decision

A bad credit loan is an option to consider for would-be borrowers who are struggling to find credit from other sources.

It's likely that the interest rates levied on such loans will be high, a reflection of the borrower's lack of other choices and the fact that they're likely to have a poor or non-existent credit history.

Bear in mind that people who have had County Court Judgements (CCJs)† against them or those who have been declared bankrupt† in the past are unlikely to be accepted for a loan offered through Gocompare.com.

What's more, making an unsuccessful application could damage your credit score even further.

What's a bad credit loan?
A bad credit loan isn't a 'bad' thing in its own right - it's simply a loan for people with a poor credit history.

Perhaps you've missed repayments, missed bill payments and/or made failed applications for credit.

Even if you've never borrowed in the past, you might still struggle to qualify for the market-leading loans. After all, the lender has nothing to show that you can be relied upon to make your repayments.

To some lenders you're too much of a risk, but to others you're a chance to do some business in a competitive lending market.

Why choose a bad credit loan?
There's no getting away from the fact that if you're considering one of these products it's likely to be because your options are limited.

Having said that, these are acceptable financial products that are a lot better than some of the options out there for people struggling with their finances.

What's more, if managed responsibly a bad credit loan could help you build or repair a poor credit score.

One way of thinking about a poor credit loan is as a last-chance saloon for your record.

If at all possible it's good to avoid taking on extra debt but, depending on your circumstances, you might be able to use a bad credit loan to manage any current deficits.

For example, you could consolidate your debt, extend your repayment period, or even cut your interest rate.

Whatever you do, though, don't use the financial breathing space that may be offered by a bad credit loan as an excuse to take out further short-term loans or credit deals.Cutting the cost of loans

Concentrate on meeting your repayments to avoid damaging your credit rating further and, if at all possible and your deal allows it, try to make overpayments to pay down your loan as quickly as possible.

Make a soft search for a bad credit loan
Because you're looking at less competitive rates, it's even more important to compare bad credit loans so that you can find the cheapest borrowing possible.

You should be aware, though, that the best deals will only be available to customers that the lender judges to have the best credit scores.

Also, if you have an application rejected it'll leave a mark on credit files, which could further damage the way a lender scores you.

That's why it makes sense to make a soft search (also known as a 'smart search') for loans before applying.

If you use Gocompare.com's smart search loans comparison tool you'll only see the deals that you're likely to qualify for, giving you a better idea of the actual rates available to you and helping you make the right application.

Secured v unsecured debt
If you're a homeowner or you have another significant asset such as an expensive car that you can use as collateral, then making your bad credit deal a secured loan is an option.

Secured loans are likely to be offered at lower rates than personal loans, and they may be the only option if you're looking to borrow a significant sum.

You need to think carefully before securing any debt against your home, though, as it's then at risk if you don't keep up your repayments.Personal loans

If you already have a bad record of repayments it's especially important that you know what you're getting into before putting your home at risk.

Take extra care before turning unsecured, personal debt into a secured loan, even if the repayment figures look attractive.

Protecting an unsecured loan
While the last thing you're likely to want or need is an extra monthly outgoing, it's worth considering an income protection policy to protect your loan payments.

If your loan is secured against your home, such a policy could help you meet essential repayments in unexpected circumstances.

http://www.gocompare.com/loans/bad-credit-loans/