Most of us fail to realise the importance of credit score unless our loan application is rejected owing to poor score. Be it high debt to income ratio; too many unsecured loans; or unsteady income flow; when your loan application is rejected due to less than perfect score, it is important to review your financial situation. You need to evaluate your loan repayment capacity and look for viable borrowing options according to your repayment capacity.
A loan broker can particularly help you assess your situation and locate the affordable loans according to your credit situation. They will guide you and introduce the best short term loans available in the market. You can compare and choose the closest match according to your needs. There is no obligation to abide by a broker’s advice.
What makes a loan deal perfect for your credit situation?
There is no formula to define the best deal. Everyone has a different requirement and so are the recommendations for loans. You must assess the deal on factors such as amount, cost, duration and ease of payment before making the final call.
While choosing an additional loan keep following things in mind:
- Does it serve the purpose?
From payday loans to short term loans to long term homeowner loans, before you avail any deal make sure it serves your purpose. It is important to evaluate your loan requirement carefully before applying for a loan.
- Is the interest rate competitive?
While it is normally believed that bad credit loans are offered at high rate, you should not be too pessimistic while you apply for additional loan. When you contact a loan broker they can help you find low cost loans for a very short period. In some cases they might help you find good rate with the help of collateral. In either case it is important to make every effort to get a low cost interest rate.
- Do I have any other alternative?
It is always good to compare various types of loans before you make the final decision. For example, if you decide to avail a payday loan worth £500 on £80 interest rate for 15 days as an emergency loan, you can check out with the lender if it is possible to avail cheaper short term loan for the same amount. By opting for short term loan, you would save on loan interest rate and would also get ease of repayment with instalments. Depending on your credit requirements your decision may vary.There are certain borrowers who seek highly flexible loans on benefits and they opt for doorstep loans instead. Thus there is no perfect loan; your situation would define what is the best deal for you.
- Can I afford the repayments?
Successful loan repayment should be the final destination of a bad credit loan. As you repay the entire loan, you build good credit history and improve your score. It is thus important to assess carefully if you could afford the loan repayments. Borrowing beyond your repayment capacity could be a financial suicide and you should stay away from such aggressive decisions with poor credit health.