Actually most of the people nowadays are not very good in managing their finance. As a result, many of them end up spending more than what we save and always remain under debt. Our credit card debt keeps on increasing and as a result most of us are having very poor credit rating.
However, people like us too need loan at times when there is any urgent need of money. During that moment, we begin to realize how poor we are in our money management skills. There will be very few lenders who will be ready to offer you loan, if your credit rating is not satisfactory. It is at that moment, we realize how important it is to maintain our finance.
Fortunately, there exist little company like LoanPig identifies Short Term loans who understand the plight of people like us and they designed few short term loans that can fit into the people who are not very good in maintaining their credit rating.
What is bad credit loan?
There are few bad-credit payday loans available which can be bit costlier short-term loan. This has been designed particularly keeping in mind of few people who has poor credit history and to help them to overcome any unexpected financial emergencies.
Few changes in regulation are really meant that most of the ‘payday lenders’ can now offer these high-cost instalment loans, which will be meant for up to twelve months.
However, the interest rates that will be charged by these lenders for such bad credit loans may vary but Financial Conduct Authority has put a cap on fees as well as charges, which will be on force.
Based on these caps, you should never make payment for more than £24/month for every £100, which was borrowed. Also you will never payback double of your original amount that you borrowed.
How can it help?
Basic idea of designing such bad credit loan will be to help people like you during temporary cash-flow shortfall. If you have good credit history then you can use credit card of 0% interest, but it will be unfair for those having poor credit history to suffer due to their poor management of finance.
Also, one more reason for having bad credit history can happen if you never have used credit facility before. Few things that you can do for improving your credit score, e.g. registering on electoral roll, but in case you never had even any mobile phone contract on your own name, probably then there will be little evidence to prove your responsible borrowing habits.
Usually, lenders prefer those people who have displayed that they have commitment about their financial responsibilities. So, if you never have met any contractual obligation as regards to your finances, then lenders will simply not know whether lending to such person will really be responsible decision or not and can decline your application.
Most bad credit lenders will know that often the reason for bad credit history can be due to simply not having a credit history too.