There are solid reasons you need a bad credit loan.
Lenders in the UK have identified a huge number of people to take out a bad credit loan for a variety of purposes.
And the variety doesn’t include bad credit issues only. People with moderately good (or bad) credit may also take a bad credit loan to use the money for other purposes and be smart in managing finances.
Money management can be a great way to make your entire life simpler and more productive.
According to research, even in a low or moderate-income, better money management can make a happier life than poor money management with high income.
Ronald is a finance advisor at a leading loan organisation in the UK, and we can listen to his take on what is the most crucial factor with bad credit loans:
“There is a reason people take bad credit loans, and it is not always to recover their credit score. You have got umpteenth numbers of purposes to take out a loan of this kind and the principle to do that is to manage your financial life better and to reduce money associated stress.”
“Many in the UK take out a bad credit loan with ‘not so bad’ credit score for debt consolidation purposes. Few of them take it out to fund Christmas activities and recover their credit score at the same time. You can use this loan for many reasons, and the good thing is your credit score always stays up…like a bonus (chuckles).”
Why is a bad credit loan such a flexible option then?
- When Exactly a Bad Credit Loan Helps You?
A personal loan with no credit check or, for example, a Christmas loan for bad credit is the type of loan that is taken out for many reasons.
Many lenders have seen their customers taking out a bad credit loan, justifying the purpose as ‘privileges of an unsecured loan’.
And that’s true!
A bad credit loan is the type of loan that ALWAYS DOES NOT INVOLVE A COLLATERAL. Collateral means an asset like a house or your car held against the loan amount for as long as you don’t repay the total amount.
On the other hand, not all bad credit loans require a guarantor.
Lending in the UK has become more flexible than you have imagined. So, a bad credit loan can be just the thing for you.
But you should definitely take it out when you need it.
That’s the question, right? WHEN DO YOU ACTUALLY NEED IT?
- When You Have to Recover Credit Score
- When You Have Got Multiple Debts
- When You Want to Get More from Your Credit Card
- When You Want a Loan with Low Credit Score for Multiple Purposes
Well, these are just a few reasons why you need a bad credit loan. There are many other circumstances when a loan of this kind becomes the ultimate solution.
Don’t worry. You’ll feel it when you’d need a bad credit loan.
For now, let’s discuss these points just mentioned.
1. When You Have to Recover Credit Score
A bad credit score can be a problem for everybody.
Firstly, it turns your credit card into a real burden. You need to pay additional interest rates. You need to make timely payments without even failing a single one of them.
Otherwise, you have got penalties coming at you.
You may also lose many credit card discounts, rewards and cashback offers.
When you see your credit score having a drop below 590, you need to fix it immediately.
A bad credit loan will immediately add an amount to your credit card account that will let you make the pending payments faster and more efficiently, which in terms contributes to developing a good credit score.
But, here’s the real thing!
When you take a bad credit loan and repay it at the right time to your lender, you make a really good point in managing your finances.
The result? An elevated credit score.
This elevation is going to be more compared to the other ones, as a loan usually involves a medium to a large amount of money.
2. When You Have Got Multiple Debts
Debt consolidation can be a serious headache for many.
At the end of the year, debts can be a bit pressing!
Okay…a lot pressing!
Debts can be tricky to manage.
And they can definitely sabotage your savings account if you consider using it.
Here is where taking a Christmas loan for bad credit can help you out. Firstly, a loan of this time usually offers you privileges for the festivity. Next, a Christmas loan is again a personal loan that is still offered in a bad credit score.
No collateral involved!
No guarantor involved!
Solve all of those debts you have in a snap using this loan and repay it in time. What’s good is that it also keeps you organized in the way of repayment procedures.
3. When You Want to Get More from Your Credit Card
The best thing about a credit card is not only the cashless transactions.
It is that credit cards come with a lot of extra advantages.
As mentioned earlier, some providers offer credit cards with cashback offers for buying things like gasoline or takeaway food.
Most credit cards will reward you with discount rates and other surprising facilities such as freebies.
But, all of this happens when the credit score stays high.
Don’t let a low credit score affect your credit card rewards. Take out a bad credit loan and enjoy your credit card rewards as they are.
4. When You Want a Loan with Low Credit Score for Multiple Purposes
So, you have got a credit score of 600?
Fine! Not too bad a score.
But you have got agendas like home and kitchen decoration, buying an affordable car for your kids as they have just got out of school, and funding your mum and dad’s insurance plans.
Now, spending all this money from your savings or your existing credit card amount can be a real problem.
Take out a bad credit loan, such as a bad credit online loan for the unemployed from direct lenders (in case you’re into freelancing or are suffering unemployment issues).
You are probably improving your credit score with a bad credit loan. But, being organised with the money and investing in areas in that ‘planned’ sense make you ‘safeguard’ your credit score too.
And that is just so good.
Not only does it safeguard and probably elevate your credit score, but it also saves you from utilising your credit limit beyond what’s required.
- To Conclude
So, a bad credit loan gets to be the best choice whenever you need a good credit score.
Just remember to utilise it in the right ways. And don’t take much stress.