Jon's Blog

Practical tips to help you improve your credit rating and avoid expensive high interest loans

3 Things To Avoid When Finding Bad Credit Loans

Each and every day many people go online, type in “Bad Credit Loans” into Google in search for a company who will lend them money despite of their bad credit rating.

Let face it, with a poor credit history your options to borrow money are more limited, and therefore many companies have seen this as an opportunity to take advantage of people with ‘dodgy’ lending practices and charging exorbitant fees and driving people deeper and deeper into debt.

So when you are on the internet looking for a ‘bad credit loan’; what are the things that you should at all costs avoid:

  • Avoid Companies Without A Consumer Credit License

A Consumer Credit License (CCL) is issued by the Financial Conduct Authority (FCA).

The FCA is a UK Government body that offers some protection just in case something goes wrong; to find out a companies CCL just look in the footer of their website.

If you borrow money from a company without a CCL you will have much less protection if something goes wrong; for example a lender advertises on their website an interest rate of 100% APR; but when you take the loan out you realise that in fact they are charging you 1000% APR, if they do not have a CCL you could have much less back up.

Plus, do you really want to be dealing with a company who is not professional enough to get a Consumer Credit License; especially when there are many other companies out there who offer great loans and do.

  • Avoid Picking Just One Bad Credit Loan

There are many types of bad credit loans available online – pay day loans, doorstep loans, guarantor loans plus many more.

It is easy to be swamped by the options; though by doing a bit of research up  front you could save yourself the heartache and stress of an extremely expensive loan that you cannot pay back to a lender who could also be heartless and aggressive.

Though to avoid this all need to do a little bit of work and shop around;

  • make a few loan applications
  • compare the costs of each loan
  • compare the professionalism of each company

Apply for a loan with Clear Credit and your application will be sent immediately to over 10 guarantor loan lenders; you will have loan offers to compare within minutes of making your application.

  • Avoid Just Focusing On the Money You Need & Speed

When a financial crisis hits, it is very difficult not to just focus on the money you need and the speed in which you need it.

This type of thinking can often lead to bad decisions; such as taking out expensive loans that in the long term may increase your financial worries.

So instead we would recommend taking a deep breath and thinking about your situation, focus on how much you can afford to pay back, then think about the absolute minimum amount of money you need to get by and borrow.

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If you have bad credit and are looking at the possibly of getting a loan, why not check out our loan calculator?

Jon Edward
Jon Edward
Passionate about helping people find options, when on first glance there do not appear to be any.

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