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Getting a Bad Credit Loan in the UK

Many of us have been in this situation – you have bad credit, loan UK companies won’t touch you with a barge pole, and yet you’re in desperate need for money for one reason or another. It seems that no lender will even consider you for a loan. So, what are the alternatives?

The next option is to approach an official lender who specialises in offering a bad credit loan. UK lenders such as these offer interest rates that vary from company to company, so it is well worth doing a comparison search online to see what’s available. You might find one or two companies who are more than happy to lend to customers with bad credit at a reasonable interest rate.

If no loan company is happy to lend to you based on your credit rating, then you could consider getting a payday loan. These loans work much the same as a standard loan, except they are only to be used for short-term purposes. If you are in full-time employment, payday loans companies will be happy to offer a quick loan, under the condition that it is paid back once your employer pays your wages. Expect a higher than usual interest rate with this particular option however, and be prepared to be short of funds after you pay the payday company’s invoice!

When it comes to obtaining a loan, nothing beats improving your credit rating by paying regular direct debits and keeping payments up to date. One useful tip is to opt for a pay-as-you-go credit card, which allows you to spend only up to the amount that you have added to your credit. The major benefit to this is that pay-as-you-go credit cards have a positive effect on your credit rating. After a few months, you’ll soon see a significant improvement on your credit rating, and might be able to apply for a loan with a more reasonable repayment plan and interest rate. Applying for a bad credit loan in the UK will then simply be a bad memory.

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