Personal loans come in two basic forms ? unsecured and secured. Depending on your credit history and whether or not you are a homeowner, the type of personal loan available to you may vary. When you apply for a personal loan, the lender will carry out a check on your previous borrowing history and will come to a decision based upon your previous credit history. If you have a good credit rating and want to borrow a smaller amount (under ?25k) over a shorter repayment period (usually no more than 10 years), then it is likely you will be accepted for an unsecured personal loan. These normally come with a higher interest rate than a secured loan. However, the loan is not secured against any of your assets and is granted based on the lender's opinion that you have the ability to fulfil the repayments so they are a good option for lower sums of borrowing and especially if you are not a homeowner.
If, however, you are looking to borrow over ?25k and you are a homeowner, then the secured route is your likely option. With a secured loan, you can often borrow up to 125% of your home's equitable value over a timescale ranging up to 25 or 30 years. As the lender is securing the loan against your property, interest rates are lower and it usually provides a cheaper option as a longer term finance solution than an unsecured loan.
If, on the other hand, you have a bad credit history, then even though it is difficult to obtain a loan on the high street, there are many reputable brokers who specialise in bad credit loans. With an estimated 1 in 5 people in the UK having some kind of adverse credit history on their file, brokers can offer people with bad credit an unsecured loan. In most cases, however, they will usually encourage homeowners who have a poor credit history to opt for the secured route to minimise the risks. Therefore, even if you do have CCJs, arrears and a bad credit rating, you can still pick up great deals on secured loans and, as the loan is secured against your property, the lender does not need to worry about your previous credit history.
A debt consolidation loan is a way to bundle all your credit cards, store cards and HP agreements into one simple affordable monthly repayment. They have a great reputation for enabling people who have amassed a lot of multiple debts to get back on track. They come in both unsecured and secured form and will usually mean a lower interest rate than all of your other existing agreements leaving you with more money in your pocket. If your other combined debts are over ?25k and/or if you have bad credit, then the secured option will be the route to take but if you have a good credit history and your debts are less than ?25k, then the unsecured route may be your preferred choice.
Therefore, when it comes to the loans market, there are many options available no matter what your circumstances and it is simply a matter of finding out what are the best options for you personally.
Fixing your bad credit can be very stressful at times and it feels like it's never ending where the bills keep piling in and it seems like you're making no progress. While most people tend to just give up and declare bankruptcy, there are many ways you can fix your bad credit and start off where you started when you first grabbed your first credit card.
Below, I'm going to list off a few steps you need to take immediately so that you can re-build your score back up. Some of these steps aren't hard at all and in fact, you can start these today, while others are going to take hard work and dedication. We all know that money doesn't? come easy and in order to get it, we need to work for it.
Let's check the credit reports
The first thing you're going to want to do when you start your bad credit fixing job is request one of your credit reports. The government has made it easy to obtain one since they passed a law stating you can get your credit report for free with no strings attached. Once you get a hold of your credit report, you can either request it to be mailed or you can print it from your computer.
Once you have that report in your hands, you're going to want to study everything on it. This report is going to have every account you've opened in the history of your life. Simply glance over everything and make sure everything is legit. If you find one thing that looks fishy or suspicious, you're going to want to report this immediately. This could be hurting you more than you actually think. To fix an error, contact the bureau you requested the report from.
Attack the debt
Now comes the fun part when it's time to attack the debt itself. There are many ways you can attack the debt from contacting a company to assist you or making a plan yourself. A simple plan that most people like to follow is by simply paying off the littlest or the highest balance off first and going from there. People find that if they concentrate on one card, it's a lot easier to focus.
The important thing to remember is that you must pay the minimum at least on all the other cards so that you can avoid more trouble. Remember, as I stated earlier, you're going to need money in order to pay off your bills. If you need a second job to attack your debt, get it! You can always quit your other job when the debt clears.
Fighting off debt isn't fun but if you have the motivation and dedication, you can easily fight it. Nothing feels better than having a clean slate when you pay off that last bill. The last thing you'll want to do is declare bankruptcy. Once the dust settles and your credit starts to re-build, you'll feel a lot better and your family will too.
Both Edward Banks & Tom Tessin are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Edward Banks has sinced written about articles on various topics from Personal Finance, Payday Loans. Getting good advice about is important. Edward Banks publishes more of his guidance on the website. Edward Banks's top article generates over 3600 views. to your Favourites.
Tom Tessin has sinced written about articles on various topics from Mileage and Fuel, Education and Finances. Find the and more of Tom's work at FINDsecuredcards.. Tom Tessin's top article generates over 673000 views. to your Favourites.