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Can bad credit loan in the UK help you eliminate your financial woes

by Jim ONeil on September 4, 2012

in Bad Credit Loans

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After the global financial meltdown, many consumers in the UK defaulted on their payment and incurred overwhelming debt.

In this situation, you may not be able to apply for a new loan as your credit report is completely blemished.

The creditors may consider you high risk borrower and may not approve your loan application in order to consolidate your debts.

Are you wondering whether you can get a bad credit loan in UK? The answer is yes, you can obviously get a bad credit loan. However, you need to find a lender diligently in order to pay off your existing debts.

There are many lenders who offer loans to bad credit borrowers in order to manage their emergency expenses. These loans are especially designed for the bad credit borrowers. Therefore, in UK you can apply for a bad credit loan in order to consolidate credit card debt.

When you have poor credit you may not be able to apply for a loan from a traditional lender. After the colossal financial collapse in the UK many people suffered job loss as well as wage deduction. Therefore, they failed to pay off the owed amount and further complicated their financial situation.

There are two types of bad credit loan in the UK like:

1. Secured loan

2. Unsecured loan with high interest rate  

Secured loan: When you apply for a secured loan you need to provide collateral against the loan. Therefore, you’re required to use your car or property against the loan. When you provide collateral against the loan, the interest on this loan is comparatively lower than unsecured loan. However, if you default on your payment, then the property used as collateral can be repossessed by the creditors in UK.

Unsecured loan: When you apply for an unsecured loan with poor credit, then the interest charged on the loan is comparatively high than the loan offered to borrowers with good credit. When you apply for an unsecured loan you’re not required to provide collateral. In order to apply an unsecured loan with poor credit in UK you need to provide income proof and bank statement.

The duration of the repayment period stretches from 3 to 25 years in the UK.

There is a growing competition in the financial market with the introduction of a bad credit loan. There are many lenders in the UK who are willing to offer loan to bad credit borrowers. With the help of a bad credit loan many people have managed to regain control over their financial situation and reestablished their credit report.

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