The irony is that the only way to improve your score is to prove you can repay any personal loans you have borrowed. However, your opportunities for proving yourself to lenders are limited when you have a history of poor credit, so many people are left feeling like they are stuck in this situation without a hope of improving their profile.
Instalment loans for bad credit loans
Luckily, there are now some lenders offeringinstalments loans to those with bad credit to help them enhance their financial profile. It is important not to view these personal loans as “free money” however, particularly if it is your first time borrowing, and remember that you will have to pay it back with added interest.
Why a personal instalment loan?
If you can prove you have a steady, reliable income, then your bank may offer you a personal instalment loan. Your annual salary may need to be above a certain threshold, and you will need to give proof of your ID and home address, as well as give references to vouch for your character if you are a new customer.
If you have been with your bank for a long time and aren’t in a large amount of overdraft debt, they are more likely to give you some suitable options so you can improve your situation. They may suggest increasing your overdraft facility, taking out a credit card or applying for personal loans.
Whatcan you afford to pay back?
You will need to consider your options carefully and work out what you can afford to pay back. If you are simply looking to improve your credit score, start small by borrowing a minimal amount that you know you will be able to pay back each month. Missing repayments with have a negative effect on your score, which is the last thing you need.
If your bank does not accept your application, there are still other options you can try. Bear in mind that each application this will have an impact on your overall score – a negative one if you are repeatedly refused – so try to leave some time in between applications to avoid this happening.
If you do not have much luck with your bank, you could always try looking online for a personal loan (installment). You will need to make sure you apply through a reliable lending source that can connect you with reliable partners that won’t take advantage of your situation. If you are looking to finance a laser cutter or equipment you can usually inquire with the company before seeking an outside lender.
Unfortunately, many lenders that advertise their services to those with poor credit will charge higher interest rates, meaning the borrower ends up with more financial struggles in the long run. To avoid this, look for lending companies that advertise low APR that ranges from 5.99% up to 35.99%.
Personal loans are usually for small amounts (as opposed to a mortgage, for example) but can be available up to £25,000.Don’t be tempted to borrow more than you can afford to pay back, as this will simply lead to you falling into debt and further tarnishing your record.
When you are taking steps to be approved for borrowing, your monthly repayments will be taken into consideration. Therefore, you should not be accepted for a larger amount than you can afford to pay back. It is important to work out how much you can spare of your monthly income to avoid missing repayments – this way you will keep your score in the green for personal loans.
If you need to find a laser to finance look at the company before attempting to finance. You can check reviews online first. That is usually the safest route to go. This way you can learn from others’ experiences.