Why Bad Credit Loans Are Better Than Debt Settlement?
Posted: May 05, 2018
A lot of borrowers fail to realise the significance of credit score until it falls to its bottom and they receive rejection slips. Be it loss of job, business loss, health emergency or a social tragedy in your life, a financial deadlock is something which needs to be worked upon. Incessant cash crunch and poor credit worth can make things worse for you.
While main street lenders do not entertain loan applications with poor rating, online you can find some of the exclusive offers for bad credit borrowers. You can use professional loan advice of regulated loan brokers to find loans according to your repayment capacity. Bad credit loans are typically more expensive than conventional loans but they help you stay afloat despite cash crunch.
With infusion of additional loan you can fund your emergency cash gaps without any embarrassment. Repaying additional loan you can certainly build your score.
How to get bad credit loan?
Most borrowers with bad credit apply for unsecured loans online. In the absence of loan guarantor and loan eligibility, you can contact a regulated loan broker and share your credit requirements. Irrespective of your past credit history they search for tailored loans for you. Compare and choose the one that best suits your affordability.
However it is not easy to manage high paying loans with bad financial health. You must thus discuss flexible repayment options and explore ways to stay afloat and improve your score. The regulated brokers are authorised to share loan advice.
Debt settlement vs Additional borrowing
Debt settlement is basically the act of settling down your debt due to incapability of repaying the loan. You basically appeal the creditor about your inability to meet the financial obligation. However this comes into play only after multiple skipping of repayments. This also suggests low score due to non repayment. Only after you completely payout out the settled amount, your debt account would be marked as settled on your report. This may close the account but the red flag would stay forever in your credit report.
This is the very reason why it is not suggested to skip the repayment. Instead using additional loans you can successfully stay afloat. A lot of financial advisors suggest to raise additional loans such as home owner loans or loan against property for debt consolidation. It doesn’t matter if you contact a conventional lender or online lender, as far as you can repay your deal. Your lender doesn’t hurt your score. However it is important to deal with registered lenders only.
Contacting an FCA regulated loan broker indeed is one of the convenient ways to search for the cheap and safe deals for you. They would help you make an informed decision with minimum hassles.
Emily Hilscher is working as a finance consultant with Loan Broker and writes on various topics related to loans and other such alternatives. She has an extensive experience in lending and brokering industry of the UK.