While the importance of credit score is well known, most of us realise it after a loan application is rejected due to bad credit score. As a result when it comes to borrowing for short term loans for bad credit and no guarantor or collateral is there to your rescue, a lot of myths cripple the decision making process.
Let’s bust the 5 most common myths associated with bad credit short term loans. This will help you make an informed decision and safeguard you against the loan sharks at the same time.
Myth 1: Only a perfect credit score can earn you a loan
Your credit score is undeniably one of the most important factors that lenders consider before setting up the terms and condition of the loan. In fact the APR of the loan is determined after assessing your credit score. But stating that you can not avail loan with a low score or less than perfect score would be an understatement.
Hundreds of private finance companies online are dedicated to help bad credit borrowers mend their financial muddle. If you need bad credit loans you can successfully avail it in the UK. However you should ensure that you deal with only FCA approved firms.
Myth 2: After rejection, it is impossible to get loans
Many people believe that a loan rejection tempers your chances of loan approval. Herein you need to understand that despite a loan rejection by a conventional lender, the possibility of availing a loan doesn’t cease to exist. You can still avail loans if you contact the finance companies that specialise in bad credit loans. Indeed it is wise to contact a loan broker for the same as they would not only search the required loan but would also ensure that a single application reaches out to multiple lenders with a soft credit check.
Myth 3: It takes more time to process bad credit loans
This is one of the fastest spread myths about bad credit loans. For, bad credit loans are planned keeping in view of urgent needs of the borrower. As the loans are available online the processing entails shortest possible time. You can even apply for same day loans with bad credit. If you have your papers in place, proving your identity you can avail swift loans without a delay.
Myth 4: It is more difficult to avail a small loan
Call it a marketing gimmick or a myth, it is widely spread that it is easier to avail the loan for bigger amount as against the smaller loans. Before resorting to such views, you should ask yourself when lending to high risk borrowers, what safeguards the interests of the lender? Would a lender prefer to give a loan for small period or short one? Short term loans for bad credit are always available with more ease. However you should be wary of contacting just any lender as a lot of loan sharks are also active in the UK.
Myth 5: Direct to lender deals are better deals
This is a sheer marketing campaign that is against the interests of borrowers. The loan brokers are basically mediators between lenders and borrowers. You can contact them by filling a simple form on their website.
With a broker by your side, you get an edge to make a choice. They are financial experts who pick choose loans according to your requirements. They also compare the deals before introducing to the borrowers. You can decide the terms of your loan and thus have an upper hand. Your lender can not dictate the loan terms on you.
The fact remains that a loan broker is your best buddy and ensures you comfort of direct to lender deals according to your loan affordability. Knowing all these facts I hope you are ready to make a better borrowing decision without wasting a single delay.