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Bad Credit Loans: Financial Help With Credit Improvement
Credit worthiness is an influential factor when it comes to getting loans approved. A high level of credit worthiness shows that you are not going to renege on your payment obligations. But if you have bad credit, and consequently a low level of credit worthiness, then you will face difficulties while applying for loans. However, if you apply for a bad credit loan, which is a specialized loan tailored to meet the needs of those with bad credit history, you will receive financial help without any fuss.
A bad credit loan can be availed by anyone whose credit history has been affected by one or more of the following:
*Arrears or missed payments
*Defaults or non-payments
*County Court Judgments
*IVAs
Bankruptcy None of these comes between you and your bad credit loan. However, your credit score, income and recent credit history might be taken into account. Get your credit score updated by a good credit reporting agency so that there are no errors and no information missing. Also, if you have any small debts that can be easily repaid, do pay them off to make a favorable impression.
With the help pf a bad credit loan, you can finance any personal undertaking. A family holiday, a wedding, college fees, medical charges, paying off huge bills and debts- any of them can be easily covered. You can borrow the loan under a secured option or an unsecured option depending upon your requirements. If you need an amount up to £25000, taking an unsecured bad credit loan is more feasible. The repayment term is up to 10 years. If you need a larger amount, you can provide collateral and go for a secured variety. Repayment period is longer, up to 25 years at least, depending upon the amount.
Bad credit loans are said to have high rates of interest, so it will be better if you compare the quotes of various lenders to select a more affordable one. Borrow an amount that is within your repayment capability. That way, you can pay off the loan in time and help improve your own credit.
Credit Card Debt Management Consolidations
Credit card debt consolidation can be of two types consolidating all your debts into one debt, or taking a fresh loan to pay off all the existing debts. Technically the latter type is called debt consolidation loan but the term debt consolidation is often used to mean both methods. One should confirm before committing to either alternative and choose whatever method is more suitable to his/her situation.
Mere debt consolidation is not a loan. It is the process wherein you combine all your credit card debts into a single debt with the help of a professional debt management/repayment program of a financial institution. The representative of the program negotiates on your behalf with the credit card companies regarding your outstanding debts. The duty of the representative is to secure a lower rate of interest and reduction in penalties for late payments.
Instead of paying several separate bills every month you make only one consolidated monthly payment of a fixed amount to the debt manager as if there is only one loan. It is his duty to make the payments to the individual creditors and keep your accounts up to date. The programs will require you to stop using your cards till complete repayment of debts. With the systematic guidance of a professional debt management program you can pay off all your debts in a much shorter time than you expect. The service involves fees for securing all these benefits.
The second type of debt consolidation entails taking a fresh loan to pay off the existing loans. It is the oft resorted measure to pay off the credit card debts. A debt consolidation loan facilitates a fixed rate of interest, lower monthly installments and the convenience of servicing a single loan – instead of coordinating between many debts with different rates of interest. Credit card consolidation service providers or help centers extend the necessary assistance to get the loan.
One should be careful before going for a consolidation loan because more often than not they charge a high rate of interest and generally they are secured loans – unlike credit card debts, which are unsecured debts. A default may result in losing the property given as collateral. Choose only a loan with a competitive rate of interest.
Debt consolidation of either type does not revamp your credit rating overnight. But it can help improve your credit history and ensure a debt free future with careful planning. Also, it protects you from harassment of creditors and the humiliation of filing for bankruptcy.