A bad credit loan is extended to the borrowers who either have no credit score or a FICO score of 580 or less. This low score may be due to any of the reason like CCJs, IVA, arrears, defaults, divorce, late payments or Bankruptcy. To attain these loans a borrower must be at least 18 years old and have a regular source of income.
The bad credit loans allow you to use the attained funds in executing your various demands like debt consolidation, home renovation, educational purposes or meeting wedding expenses.
These loans can be obtained in both the secured and unsecured form. To avail the secured bad credit loans, you have to offer your valuable assets as collateral. Through these loans, you will be able to apply for a loan ranging from ?5000-?75000 at low interest rates for a period of 5-25 years. On the contrary, unsecured bad credit loans do not require any collateral pledging. These loans are equally beneficial for tenants and homeowners. Through these loans a borrower can apply for a loan ranging from ?1000-?25000 for a period of 6months to 10 years.
A bad credit loan plays an important role in the life of a bad creditor. It puts an end to the troubles prevailing due to bad credit. After attaining these loans a borrower must try to pay off the bills timely and reduce the number of creditors. In addition to this a borrower must make an effort to keep the borrowed amount under 35% of the credit limit, and avoid taking new debts. On ensuring timely repayment of the installments and paying back the debts on time a bad creditor can easily mend his/her credit score.
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