Do you have bad credit problems but need a personal loan? If so,
here's some good news - you're not excluded from taking out
personal loans even if you have CCJs, mortgage arrears,
defaulted loans payments and other bad credit issues to your
name. All you have to do is follow this 5-step plan and be
absolutely sure that you can meet the repayment demands on any
new personal loans that you acquire.
Personal loans bad credit step #1 - your personal budget
The first thing people with a bad credit history must do in
their quest to obtain personal loans is to draw up a personal
budget plan. This is essentially a record of your income versus
your household expenditure on a monthly basis and can be used to
figure out how much money you will have left over with which to
repay a personal loan.
To draw up a personal budget plan you'll need to factor in all
of your household outgoings. This includes the mortgage / rent,
all direct debits as well as annual costs such as the insurance
and MOT on your car. Don't forget to include the gas &
electricity bill, along with council tax, all insurance policies
you are contributing to and your normal household bills like
food & clothes shopping. If you have IVAs in place to pay off an
existing bad debt then this should be included also.
When you've added up your expenditure give it a realistic feel
by adding on 10% of the total as a contingency fund. Whatever
you have left over can then be used as repayment for personal
loans.
Personal loans bad credit step #2 - research the personal loans
market
With your personal budget plan in place you can now research the
personal loans market. Consider first the specialist loans
companies who cater specifically for people with bad credit
problems. By doing so you increase your chances of being
accepted for a personal loan. It is also worth remembering that
every loans application that is denied is noted on your credit
file, contributing to your bad credit rating. So, it pays to
pick and choose the lender instead of taking a scattergun
approach.
Personal loans bad credit step #3 - be realistic
When making your loans application, be realistic in the amount
you request to borrow from the lender. Interest rates on
personal loans for people with bad credit are often higher than
on standard loans terms. You may also only be eligible to borrow
a certain amount from some specialist lenders. Check the lenders
policies before making your loans application and use a personal
loans calculator to be sure that the repayments on a loan are
manageable.
Personal loans bad credit step #4 - don't lie
Lying on your loans application form will only make things worse
for you when the lender finds out...and they will find out!
Personal loans bad credit step #5 - volunteer supporting evidence
Even if it is not requested do volunteer supporting evidence for
your personal loans application. One of the best pieces of
evidence to volunteer is your personal budget plan as not only
will it give lenders an idea of what you can afford on your
repayments, but it shows them that you're serious about finding
a solution that suits both you and the lender despite your bad
credit rating.
About the author:
Matt Bourne has many years experience in the
Personal Debt
Loans and
Unsecured
Personal Loans areas of the loans industry.
