Poor Credit Loans: Mends Financial Fences

By: Tom Dikkin

Borrowers having bad credit history were earlier considered to be untouchables in the loan market. Their credit report is blemished with records of arrears, defaults, late payments, CCJs and IVAs. But with increased competition, a whole group of lenders have emerged providing loans to these people in the form of Poor Credit Loans.

As the borrower is already tagged as a bad credit, lenders will first of all make sure that he has the ability to pay back the loan. Decision on interest rate will not only depend on credit condition but also on income, repayment ability and presence of collateral.

For getting larger amount of loans, a borrower can take secured poor credit loans by pledging their home, car or any other valuable as collateral. He can get loans up to ?75000 depending upon the value of the collateral. He will also get a longer repayment period in the range of 5 to 25 years.

For smaller amounts, unsecured poor credit loans will be appropriate. These loans provide amount up to ?25000 for shorter repayment periods ranging from 6 months to 10 years.

Poor credit loans are also available from online lenders. To get better deals, borrowers should ask for quotes from different lenders to compare their schemes. This way they will get competitive rates as against high rates of banks and financial institutions.

Prior credit checking is done in poor credit loans. So, borrowers have to produce a copy of their credit report before the lender. It is to be ensured that the report correctly mentions all positive developments regarding the payments made in the past. To get better rate and term conditions, it is prudent to improve credit rating as far as possible before approaching a lender.

Poor credit loans thus give borrowers the opportunity to improve credit rating by making regular repayments apart from meeting financial needs.

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