When you are struggling with poor credit, it can seem impossible to be accepted for the alternative finance that you may find yourself needing in a financial emergency. However, it is not impossible should you work on finding a reputable bad credit lender with affordable interest rates. To help you get started, we have compiled a list of elements you should consider when choosing a lender to avoid.
Check For FCA Approved Lenders
For many of us, it is a common misconception that those that have bad credit are unable to apply for alternative finance should they find themselves in a financial emergency. However, this is not the case. There are several lenders out there that you can choose from, but also some that you should avoid if you have a poor credit score. Before applying with the first loan provider that you find, you should consider if they are registered with the FCA. If they cannot be found on the registry, then you should not be borrowing from them as you may be putting yourself at risk.
Check Your Credit Score Before Hand
Though there are several loan types out there for those that are struggling with their finances, it is important to make sure that you begin to take the steps on improving your line of credit before applying. By taking the time to pay off debt and check for incorrect information on your credit score, you are improving your chances of being approved by guarantor loans direct lenders and other bad credit direct lenders.
Look At The APR Small Print
Another element that you should decide upon when applying for a loan is those with high-interest rates. If you are already struggling with your line of credit then it is important to look at the small print. By looking at the interest rates and working out the monthly repayments, you are able to determine if you are able to meet the monthly repayments and ensure that your borrowing does no further damage to your line of credit. Though this may appear to be a time-consuming process, to begin with, this can prevent further damage to your line of credit.
Assess How Much You Can Borrow With Them
The final element that you should consider is how much you can borrow from your chosen lender. With several registered lenders allowing you to borrow £1000 over the course of a maximum of three months, any lenders that allow you to borrow more should be avoided. By ensuring that your chosen lender is FCA approved, you can then rest assured knowing that restrictions are being followed, allowing you a level of protection when borrowing you chosen loan amount form them. This is crucial when borrowing money with poor credit as even one missed repayment could damage it further.
With this in mind, there are several elements that you should consider to make sure you are avoiding all the direct lenders that could be damaging to your finances as a result. Where will you begin when finding your direct lender?