A bad credit loan is simply a personal loan which is available to customers who have a bad credit history, and therefore find it difficult to get a personal loan from other places. Bad credit loans are designed for people who have CCJs, arrears or have been refused credit from other places. As your credit history is bad, lenders such as banks could see you as a high risk borrower, which in turn means the interest rate on your loan is likely to be higher.
Learn more about credit ratings and how to improve your credit score.
How Is It Different To A Personal Loan?
There is no difference between a bad credit loan and a personal loan, only that people who have been refused a personal loan by other lenders for having a bad credit history are more likely to be accepted for a bad credit loan.
Both are loans which can be borrowed by a customer. They have interest rates, need repaying in full over a set amount of time and will affect your credit rating.
How Do They Work?
Bad credit loans work just like any other loan. You apply, are accepted and need to make repayments on set dates.
How Expensive Is It?
How much your bad credit loan will cost is dependent on how much you wish to borrow, how long you’d like to borrow the money over and your credit history. Use our loan calculator to get an idea of how much the loan will cost.
If you have a bad credit history, you could be seen as a high risk borrower, therefore the interest rate on your loan may be higher.
How Do I Apply?
To apply for a bad credit loan with Provident, click here. We ensure you can only borrow what you can afford to repay, and you always know the full cost of your loan upfront. We pride ourselves on our face to face service and our transparency.
Does It Affect My Credit Rating?
Yes. All loan products affect your credit rating. If you repay the loan in full and on time, this will have a positive effect on your credit rating. A good credit rating is likely to ensure you could borrow money more easily.
Hopefully you’ll understand more about bad credit loans, how they work and how they can affect your credit rating.