Recent research from Datamonitor shows that the average amount of personal debt in the UK is now over GBP4,000. This is the first time that this has ever happened. In February 2005, it was reported that each adult in the UK owed GBP4,004 in debt from personal loans, credit cards, finance deals, and overdrafts at the end of 2004. Even though interest rates went up last year and the housing market is still uncertain, it looks like people are still borrowing a lot of money.
Personal loans for people with bad credit have also added to this amount of debt. In the UK, the number of people who want personal loans with bad credit has been going up steadily. The number of CCJs, mortgage arrears, and house repossessions is at an all-time low. This means that people with bad credit histories can now get personal loans even though they have a bad credit history. This has made it easier for people with bad credit to get personal loans. Loan companies are more likely to give credit to people with bad credit based on their income-to-debt ratios and their ability to handle debt responsibly.
Facts about loans for people with bad credit
Credit issues Personal loans are great for people with bad credit who have had trouble getting loans in the past or for people who rent. They are given out by loan companies that specialise in giving out money based on things other than your full credit history. If you have CCJs, bad debts, mortgage arrears, or have been declared bankrupt, these specialist loan companies can help you.
People with bad credit can choose between two main types of personal loans: secured bad credit loans and unsecured bad credit loans. Secured loans need collateral, like equity in your home. Unsecured loans don't need collateral, but it helps if you own your home.
Personal loans for people with bad credit will have a higher APR than other personal loans. On a bad credit loan, it is not uncommon for the APR to be 2% to 4% higher than on a standard personal loan. The total amount you can borrow will also be less, and your minimum monthly payments will probably be higher as well.
A personal loan for people with bad credit is a good way for them to start fixing their credit history. In this case, time heals all wounds, and the longer you go without missing payments on your personal loans, the better your credit record will get. In fact, many companies that give out bad credit personal loans will switch you to a standard personal loan with better rates if you can show that you can pay back the loan for the first two or three years.
