Credit is how we are rated financially. Your credit rating is affected by almost anything you do with regards to money. If you take out a credit card your vendor will be reporting to the bureaus to update them of how you much you spend, if you manage to pay your bills early, on time or late and various other things. This also applies with banks, your bank will notify the bureau of your limits, how often you go overdrawn and if you miss a direct debit and even phone companies are in with your phone bill. Generally if this credit is bad we can’t take regular loans or credit cards and are forced into looking at loans for people with bad credit.
Our credit score affects us in many ways. Once it starts to get bad you will be declined for things that may be essential to your working lifestyle. Phone contracts can be declined or you may be forced to get a longer, more expensive contract; the bank will deny you an overdraft or credit card and you will not be able to get a car on regular finance. Everything will cost you more and you may not understand why.
Typically a few years ago loans for not available for people with bad credit and if you were struggling you were forced to struggle without the help from anyone. But thanks to these vendors that now offer solutions for people with bad credit help is at hand.
So what’s the difference between a regular loan, and a loan for someone with a bad credit history?
Well you’d assume from how hard it was to obtain one before it would still be relatively difficult to get a loan, however if you thought this you’d be far from right. It is now easier than ever to get a loan if you have bad credit and there are many advantages to it. The main difference between the loans is the amount of interest you have to pay back.
You obtain a bad credit through not paying things on time and therefore the vendors use this to make you pay a significant more interest than your standard loan. The loans come in both unsecured and secured loans (much like the regular bank loans) and follow the same standards. A secured loan requires a down payment as such, this typically involves putting your house in possession of the bank in case you can’t pay back the amount you borrowed. Unsecured loans do not require this type of security and can generally be applied for and within 48 hours you should have the cash in your bank.
Loans for people with bad credit are not the only financial solution for those struggling with a bad credit history. Payday loans are another type of loan that can be received without respect to your credit. This type of loan is very simple to apply for and money is almost always guaranteed the same day; however they offer a massive amount of interest (usually over 100%). It is not recommended to use these as a long term solution and you are usually required to pay back at your next pay day. Be sure to check out every type of loan available to you when you start to look for loans for people with bad credit.