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A credit score serves the most important ground to find out your eligibility to pay back a loan. The higher the score, the higher the disbursal limit. Even if you take a short-term loan, credit check run is paramount, but it does not put hard inquiries on your report. However, it does not mean that you will overlook the importance of a good credit history. Many direct lenders, taking your emergency needs into their account, approve payday loans even if you have a bad credit report, but they come with high interest rates. Bad credit payday loans with guaranteed approval UK can be very expensive to afford because lenders do not trust your creditworthiness. They disburse money at high interest rates to mitigate the risk involved in it. You may shrug off the importance of a good credit report because you can avail the loan without having an excellent report. With perfect score, you can negotiate for interest rate with the lender. The higher the score you have, the lower you will pay the interest. You strain every nerve to elevate your rating despite you end up with high interest rates. Here are a few mistakes that cause wreak havoc on your credit rating. Having several loans within a short period When you apply for multiple loans and credit cards, lenders make hard inquiries so as to know your credit score. With multiple loan applications, you invite barrages of inquiries, interpreted as you are under extreme financial burden and you are relying on borrowings for your day-to-day operations. Lenders doubt your creditworthiness due to which they may turn down your applications. If they approve it, they will levy high rate of interest to minimise the risk of defaults. Being oblivious to errors lingering in a credit report Even though credit bureaus manage your credit report excellently, they can make mistakes, after all to err is human. It is your responsibility to peruse your credit report periodically. Besides, make sure that it does not consist of a default that you have not made. Even if you do not get enough time to look over it occasionally, you must check it once before applying for the loan. If you spot an unwanted error, you should immediately contact your bureau for corrections. High credit utilisation rate A good credit utilisation rate suggests that you handle your finances smartly, which must be less than 30%. If you consume either half or whole of the credit limit, the lender will deduce that you rely on borrowings only. To improve your credit utilisation rate, you should pay your credit card bills as much quickly as you can. If you are unable to clear all dues, you should not use the card for further transactions. Keep cash in your wallet for your purchases. Asking for increase in credit limit Many borrowers request for increase in credit card limit to improve the utilisation rate, but it is a big mistake. The lender cannot approve your request unless they check your reimbursement capacity. In order to know that whether it is worth lending to you, a hard inquiry will be made. This may affect your current credit rating and chances of rejections may be there. To get bad credit payday loans at affordable interest rate, you should work on improving your financial report. Pay your dues on time; avoid using your credit card, use cash instead. Be wary of information mentioned in your credit report and do not put in several applications impetuously. Read Also:-What are the Possible Alternatives of Loans with No Credit ?
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Suppose you have gone to a store to buy food and drinks. The cashier bills your items and as you thrust your hand in your pocket to take out your wallet, you realise that you have forgotten it at home. How embarrassing is it? During such situations, you always feel helpless, but you can sidestep it with the help of direct lenders. There was a time when loans included tedious and lengthy procedures, but now it has been easy like anything. You just need to have the internet access to apply for the loan and you will receive funds in the blink of an eye. Various short-term loans claim quick disbursal, but none of them outclasses the turnaround of mini text loans. To get these loans, you need to send a text to your lender. The amount will be instantly disbursed that you will pay as you receive your next salary. However, you can borrow funds even if you are self-employed. What if your credit history is poor? When you need a short amount of money to finance your unexpected need, you cannot go to the bank as they usually deny disbursing a small amount of loan. Further, if they get ready to help you, you will undergo a tedious procedure such as long applications, credit check run, and the like. They lend money only when they get convinced by your reimbursement capacity. This undoubtedly takes a long time and you cannot wait for it too long. That is why direct lenders provide this facility so that you can receive funds to avoid embarrassment. Obviously, you will not go to the bank if you have forgotten your wallet at your home. Instead, you will ask for financial help and no help can be easier than mini text loans provided you are not with your friend that time, who fortunately has money. These loans do not require collateral, guarantor and a credit check. As you send the text, you will obtain funds. However, this funding source carries high interest rates to mitigate the risk of the lender. What you need to be careful of? Text loans are as quick as light, but you will bear high penalties if you fail to pay it on time. Therefore, you should consider your repayment capacity before taking the loan. Small borrowings are not a problem, but a bigger size can be a headache. These loans do not come with flexible repayment options therefore it is suggested that you should have money set aside for reimbursement. It is useless to shut the barn door after the horse has been stolen. Similarly, it is not wise to search a reliable lender after you have met an unexpected expenditure. You should research beforehand to pick a lender offering the deal at the most affordable interest rates. You can apply for mini text loans anytime from any location when you need any small loan. However, keep an eye on the interest rates and choose only that deal where you have some relief in this term. Read Also:-The Positive Impact of Availing Small Personal Loans – Explained Life is full of uncertainties that come up without a prior notice. Even though you are financially sound, it is hard to believe that you will never fall short of finances to meet all of your needs. Financial crisis can trouble you anytime and the situation exacerbates when you encounter emergencies. Savings play a paramount role when you face tough time. However, it is not feasible to have enough money set aside all the time. You seek short term borrowings from direct lenders, but making the right choice seems a tough row to how. Well, the best option is 12 month loans for bad credit people with no guarantor from direct lenders. These loans are given for a period of one year, which allows you to pay your loan in instalments. They are also treated like a payday loan as the instalment is debited as you receive your next pay. Since you do not have to pay whole of the debt in one go, you do not feel burdened. Why are these loans worthwhile? Undoubtedly, these loans are worth it. You can meet any of your financial needs with such loans. Every month you will pay a fixed amount of instalment and therefore there is no risk of being caught in debt spiral. You can have funds disbursed within the same day. You do not need to have a good credit report, guarantor or collateral for the approval. The cost of these borrowings The credit limit for yearly loans varies from £500 to £5000 depending on a lender. Since these loans generally focus on borrowers with a bad credit record, they carry a high rate of interest. However, if you can prove your credibility by other means or you have a good credit score, you can negotiate the interest rate with your lender. Make sure that the loan agreement has no clause of upfront or hidden fees. Golden rules to follow You can stay relaxed with such loans, as you have to repay the loan in 12 monthly instalments. However, you still need to carefully decide on the amount before you apply. Make sure you owe what you can pay to avoid being caught off the wrong foot. Ask your lender if they provide you with a prepayment clause. This will help you quickly reimburse the loan. The quicker you pay back the loan, the better. Try to avoid late payments as they attract huge penalties, which will brutally affect your funds. If you fail to pay interest and penalties, you will be tempted to go for either a rollover or take a new loan. The rule of thumb says that you cut down on your expenses to ensure that you have enough to repay the debt on time. Use funds only for your emergency needs. Some borrowers invest the amount in any business and stock market. This is not a wise move because chances are your investment does not bring you any profit and it will be difficult to repay every instalment. If you want to invest in your business, you should take short term business loans. The bottom line 12 month loans are a better option than lump sum payday loans as your whole debt is paid back in equal instalments. To be certain about your repaying capacity, you should skimp on your spending. As long as you are able to manage your funds, you will be able to repay your debt. Read Also:-Be a Smart Borrower and Shake off Your Worries |
AuthorLondon Loan Bank Archives
March 2019
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