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Information on Bad Credit Loans

Before a bank lends a person money they first obtain a credit check. This gives the bank an overview of the person's past and current financial relationships and how well they were conducted. If you have always paid your bills and loans on time then your credit record will be good. If you have made late payments or not paid at all, you will have a poor credit record.Unfortunately, having a poor credit record makes it harder to obtain credit at an affordable price and leaves only specialist bad credit loans companies as an option.

Financial companies who offer bad credit loans usually apply a significantly higher interest rate to the repayments than a standard loan.This acts as an insurance for the company, in the event you default on your loan repayments. Before committing to a loan with a high interest rate, you should discuss your finances with your bank manager who may be in a position to help.

Ocean Finance is not only one of the better known bad credit loans firms, it also currently offers the lowest interest rate. At 13% AER it is still much higher than a standard loan but nowhere near the 27% some companies are asking. The loan is subject to financial circumstances and some fees will apply. Norton Finance is another well known firm offering bad credit loans. With interest rates starting at around 17% they do offer their lenders the chance to refinance to a different interest rate after 18 months of regular payments.

As with anything else, it pays to seek advice before choosing between the bad credit loans on offer. If you work at getting your finances in order, your credit record can recover meaning your chances of obtaining a standard loan will increase.

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