Loans For Bad Credit

By Matthew Bourne

Personal debt in the UK has soared to record levels over the past few years. The Bank of England has recently confirmed that personal debt on a national level now amounts to more than £1,065 billion. Recent media reports suggest however that with low interest rates on loans that the UK public are becoming increasingly comfortable (and able) to manage high levels of debt. These reports have a good body of evidence behind them too, not least the fact that in 2004 the average age of outright homeownership fell to a record low, showing that people are paying off their home loans faster than ever before!

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But, with a large proportion of the population handling some form of debt it is inevitable that some people will end up with debt problems, sometimes through no fault of their own. When this happens, loans can become difficult if not impossible to pay off. People with bad debt problems then land themselves with a bad credit history that ends up excluding them from taking out loans at a decent interest rate in the future.

Loans for people with bad credit

But, a bad credit record does not have to be the be all and end all of buying on credit. In today's competitive loans market there are increasing numbers of specialist loans companies who are ready and willing to receive applications for loans and credit from people with a bad credit history. If you have acquired county court judgements (CCJs), have defaulted on loans payments or credit agreements, have mortgage arrears or have been declared bankrupt, specialist companies offering loans for bad credit may be able to help you.

When applying for loans for bad credit, mainstream lenders tend to look almost exclusively at your credit file to assess the risk involved of lending money to you. However, specialist companies dealing in loans for bad credit are more likely to take other factors into consideration. These 'other factors' may include your current occupation and level of job security, as well as the amount of income you have coming in and whether you have equity in your home. If you are a tenant then your chances of obtaining loans when you have a bad credit history are substantially increased if you have been present at the same rented accommodation for 3 years or more.

How much can be borrowed on loans for bad credit?

How much a lender is willing to give people with a bad credit history on loans for bad credit rather depends on how well they perform in the loan company's assessment. Each bad credit applicant will be assessed on their individual circumstances, with bad credit applicants who are seen as less of a risk to the loans company being able to borrow more at a better rate than those deemed to be a higher risk. As a guide, bad credit applicants for a credit card may be able to receive a credit limit of £2500, while bad credit applicants looking for a mortgage may be able to borrow 2 - 2.5 times their salary.

Author Info:

Matthew Bourne: Matthew Bourne has been working in the loans, mortgage and life insurance industry for over 10yrs and is currently working for http://www.loansgalaxy.com and

Readers please note : You should undertake your own background checks before taking any action on any aspect mentioned in this article. Where the author has mentioned specific product details or given examples of how companies have reacted to specific situations, these should be correct as far as the author is aware when this article was written. In some cases additional background information not mentioned in the article has been used in obtaining the examples. Some examples or quotes may have been taken from information available in the public domain where all the background details may not be available. Insurers do change policy conditions and underwriting approach. They will view each situation on its own merits.

You should be aware that details of the topics written about within the articles can change. Therefore, always check out the current position before taking any action. You should also check that any action you are considering, or any proposed purchase, is suitable for your personal circumstances.