Often, it can be fairly hard for people with bad credit in the UK to get a loan. For example, banks usually turn down those with bad credit so as to ensure that they receive all of their payments in full.
However, payday loan companies, despite providing loans with extortionate interest rates, sometimes provide people with bad credit with short-term loans, although one can only generally borrow small amounts of money at a time.
Loans for people with bad credit may also have higher interest rates so that the company can account for those with similar credit ratings who are unreliable in their payments.
In addition, credit unions can offer loans for people with bad credit, as they normally base their decisions around a personal meeting as opposed to a specific credit rating (which can be found online by signing up to a website such as Experian Credit Report).
However, in the UK bad credit loans are sometimes provided if that person can offer an asset as collateral on the loan – this firstly shows that they are serious about paying back the loan, while also giving the bank or company providing the loan service a level of security on their money, thus making them more likely to lend to this person.
Another option are peer to peer lending services, where instead of borrowing money off a bank, a person with a bad credit history can borrow money off an individual – these people are normally slightly more lenient in the terms of the loan, and are less interested in one’s credit history, which is suitable for someone with a bad rating.
Overall, although some companies charge extremely high interest rates on loans for people with bad credit, and some refuse to provide the service at all, there are various ways that someone with an inferior credit rating can receive a loan.
In these difficult financial times, more individuals are finding they are unable to meet their basic cost of living without turning to some form of credit. Once you begin to use credit sources, especially short term or payday loan solutions, the level of debt can easily become unmanageable. It is easy to start a cycle of borrowing that can end with all of your income being used to pay off loans or make interest payments. When debt becomes unmanageable it is essential not to ignore the problem. There are different ways of dealing with debt; two of these are to deal with your creditors directly or to enter into debt management.
Dealing with the debt yourself can be time consuming, and relies on your ability to converse confidently over the phone or to be able to write strong letters or emails. Many companies prefer dealing directly with you and will agree to stop interest and charges if you can negotiate a repayment plan with them. This will involve being honest about your income and expenditure and being able to agree on what you can afford to pay.
Alternatively you can work with a debt management company. You will still need to be honest about your level of debt, income and other expenses. You will also need to provide details about each company you owe money to, and include reference numbers where possible. The company will then contact your creditors and organise repayment plans on your behalf, and you pay a lump sum, usually monthly to the company to cover the cost.
The main advantage of entering into debt management is that once you have provided the details, the creditors’ calls and letters should stop, and you have peace of mind that a professional is working in your best interest. However, before you enter into an agreement check the company out carefully and ensure that they are able to work with the type of creditors you have. You should read any contracts carefully, look for hidden charges and remember that taking this route could affect your credit score in the long term.
If you are having difficulties with your finances, owing money to several creditors, then a debt management plan may be the best way forward for you.
This plan would be tailored to your specific financial situation. You will answer a series of questions concerning your income and expenditure and once your bills and essential living expenses have been taken into account, the money left over will be divided between your creditors. You will not need to have any contact with your creditors, as this will be arranged on your behalf. A working plan will enable you to become happy from the worry and stress that being in debt can bring. By working with you to assess your finances, work out a budget, act as an intermediary between you and your creditors you will be given all the support you need to get you back on track.
Whatever your debts, including loans, credit card debt and mortgage repayments you can find a solution and get the assistance you need. Experienced and friendly staff will be available to help you. They will assist you with any questions you might have, or give non-judgemental and confidential advice. Your debts will be paid off easily with single affordable monthly payments. And you will be able to keep track of your account online.
A debt management plan is a way to consolidate your debt payments, while leaving you with enough money to live on and the peace of mind that comes with having your financial affairs in order. Some companies may provide support and assistance while you repay your debts, some are not of chargeable and some may require a fee. However you choose to go forward, it is clear that a debt management plan can be a valuable tool in getting your finances under control.
Being in debt can be very bothersome and stressful, this is why some debt advice can come in handy. Debt advice organizations take a practical and realistic approach that aims to help those in debt, even if it will take them 10 years or more to pay off their debts. In addition to this, organizations that specialize in debt advice usually offer welfare benefit advice – these are basically tips and hints that will help you manage your finances better in the long run, in order to avoid adding to your current debt.
When seeking debt advice, it is essential to consider all your options before deciding on a particular option. Also, the debt advice specialists will ask you various questions regarding your financial situation, questions that will help them understand your situation better, such as your income, how much you spend per month, what assets you own and what are your most important debts. This is the safest, fastest and most efficient way to benefit from top-notch advice without adding to your debts and whilst protecting your assets, like your home or your car.
What Is A Debt Management Plan?
In a nutshell, a debt management plan is an agreement between your creditors and you – the purpose of this plan is to help you repay your debts, no matter if you owe £1,000 or £50,000. The plan will help you get back on track without having to borrow extra money to get out of debt. There are numerous companies that provide bankruptcy advice, IVAs, debt management plans and loan consolidation without charging any administrative or set-up fees.
The benefits of getting such a plan are many: you benefit from professional, non-judgemental advice from skilled and experienced people who will closely analyze your situation and provide a tailored plan to meet your needs. Moreover, what’s more important is that these people think about your best interest, not about their profits!
If you feel like your debt is getting bigger and heavier on your financial state because of some factors like recession and global crisis, then what you need is a Debt Management Plan or an Individual Voluntary Arrangements or IVA.
Debt Management a Debt Management Plan
It is a plan offered to those people who have low amount of debt but does not know how to manage it, wherein your chosen company will help you get out of your debt by:
1. By helping you reduce or freeze the interest of your creditor or charges from your credit card.
2. By preventing any creditors from following you around for your payment.
3. By helping you make your debt more affordable depending on your financial capability.
4. By making your payments to all creditors easier, by paying your chosen company once a month, they will then send that payment to all your creditors. Less hassle for you.
5. Experts would advice and help you with your debt problems.
Individual Voluntary Arrangements or IVA
It is an arrangement between you and your creditors to allow a percentage of your debt to be paid based on your financial capability on a monthly basis which is usually sixty (60) months. After the arranged period, the remaining debt is written off. This is best for those people who have a large amount of debt.
The following are the advantages of IVA:
1. You can repay the percentage of your debt.
2. Your creditors are not allowed to chase nor harass you to pay off your debt.
3. Your chosen company can help you freeze the interest rate of your debt.
4. IVA can help you from becoming bankrupt
If you are going through some tough times and cant affords to pay your debts then debt relief order can help you in this tough situation. It is granted by Insolvency services and it’s considered to be a much better option that going bankrupt. Of course there are some aspects which have to be foreseen, before you can take this option. You must have a debt of less than £15000 and your income mustn’t be that high, this order is carried out for about a year and during this period you will be invincible from all the creditors. After this period you will be relieved from all the debts mentioned in the order, of course a thorough investigation will be held where your belongings will be analyzed.
You cannot even apply for debt relief order if you have a saving or own anything that is worth more than £300, you shouldn’t own a vehicle which is more than £ 1000. You will have to get in touch with the advisor who will analyze your situation and see if you are a perfect match and deserving. After the order is applied on your behalf you have to pay £90 but this can be paid in installments of six months.
To avoid all the scams, the authorities carry out extensive investigation in which they may ask you all sorts of personal questions and you will have to share all your personal information with them. If you don’t comply withal their rules then you may not be eligible for this order, also you can’t continue to borrow money more than £500 without telling your lender about this order. This and many other restrictions follow you around once you have been granted this order, but all these restrictions may end in a year if everything goes smoothly. Once your credit improves this order will be cancelled but it will stay on your credit records of 6 years.
Keep all these aspects in mind while applying for your debt relief order.
Debt management may seem a difficult task when you are faced with loan repayments or demands to settle, but it is not an impossible task.
Take a while to think about your disposable income. Disposable income is money which you spend on the non-essentials after your household bills have been paid. These can include Sky TV, cigarettes, take-aways or top branded supermarket food, and although you think you don’t spend much on these luxuries, you may be surprised at what you can save by cutting back.
For example, try ‘dropping down’ a brand on your food shop – purchase the supermarket’s own brand on everything you buy rather than a top brand name. You probably won’t notice the difference and if it contributes to your debt management then all the better. Another trick is to put the money you save from your disposable income into a box. As you watch it mount up it will spur you on to save more towards your loan repayments.
If you are currently saving money alongside paying off a loan it is an option to hold off on your savings plan and deal with the loan repayments instead. Take a look at the interest you are paid on savings versus the interest charged on your loan or debts. If that interest is higher, then use your disposable income to clear the debt before returning to your savings plan.
There are other ways to manage your debt, such as contacting a debt management agency. Perhaps you have been thinking about getting a second job to boost your income. This is potentially a good idea, although jobs can be hard to find in the current climate.
Debt management using your disposable income requires you to sit down with a piece of paper and think about what you can do without until your loan or debts are repaid. Its simple, so give it a try.
Using your disposable income and even for poor credit loans this could be an alternative way to consolidate your debt try www.easyloanscompany.co.uk/loans-for-poor-credit
A debt-management plan is an arranged repayment schedule put into place, when you run into difficulties with repaying unsecured debts. For example, credit cards, personal loans and catalogue debts.
To arrange a debt management plan, there are debt management companies who, for a fee, will manage an arrangement for you. This works by providing a statement of affairs which details your incomings and outgoings. Once both columns are completed, your outgoings are deducted from your income, and the disposable income that is remaining will be the figure the debt management company will spread among your creditors and take their fee out of your disposable income. Once a plan is in place, there will a term set for the plan and it is important you stick to the plan to avoid defaulting on the plan.
A debt management plan can be arranged yourself, however, there is no guarantee your creditors will accept your offer of repayment. For the most part, an arrangement to repay your debts at a set monthly amount will relieve any further action from creditors such as insolvency action. As long as the plan is adhered to, with regular reviews to ensure you are paying off the debts, then creditors are happy to continue with the plan and you should be able to live accordingly without the threat of recovery action hanging over you.
Debt management plans are now very popular arrangements and do work when arranged correctly. For instance, with a credit card, there is a possibility of being able to freeze the interest which prevents the debt from increasingly on a monthly basis. This will mean there is a fixed rather than a variable amount to repay, so you can budget accordingly. It is imperative a plan such as this, is stuck to and to repay more if you’re able to. It helps you to repay quicker and informs your creditors you are reasonably attempting to reduce your debt with them.
Debt relief is an order that you can apply for if you are unable to pay your debts. To qualify for a debt relief order (DRO), you must have no more than £15,000 of debt, own assets valuing no more than £300 and have less than £1000 worth of vehicles. The order is enforced by the government’s Insolvency Service, and provides a cheaper route than bankruptcy.
Not all debts are covered by a DRO, and you should make sure that your debt is covered before applying. The following types of debt are covered: credit cards; loans; overdrafts; utility bills; council tax; hire purchase and buy now pay later arrangements.
If you have debts that aren’t covered by a DRO, people can still take you to court to claim back their money. Examples of this type of debt are: Court fines and repossession orders; child support payments; student loan repayments and social fund loans.
Application for debt relief takes into account your spare available income. All the money coming into your household must be counted. You may deduct a reasonable amount for daily living costs, and if your leftover monthly income is less than £50, then you can apply for a DRO.
Owning a property almost certainly disqualifies you from applying. If you have assets, which could include antiques and shares, then their value must be less that £300 for you to meet the requirements for relief. Certain essential items are not counted among your assets; your clothes, furniture, bedding and any tools used for business purposes need not be accounted for.
You can seek an adviser at the Citizens Advice Bureau to help with your claim. The application process costs £90, this can be paid in installments but the application won’t be processed until you have paid in full. Once approved, your creditors will be informed that they may not take legal action to seek recompense.
If you require assistance to get out of debt, the World Wide Web can prove a great resource for this information. There are many details regarding firms which provide debt management services here. These companies are keen to offer great counseling and debt consolidation or settlement and all these ways are strategic in recovering a person from indebtedness.
A standard Web search familiarizes you with different options, pertaining to various firms and it is vital to seek those which are genuine. Take a number of steps in executing this verification process. Proficient debt management services for one need have good standing with the Better Business Bureau (BBB), which allows one to check on claims made by an enterprise vis-à-vis its true legitimacy.
Conduct a search with the name of your target company in order to obtain relevant details. Such action should return rating and summary of any present consumer complaints filed against your prospect. No business entity indeed may be perfect in its entire doings, yet it is critical to practice caution when approaching companies dealing with debts.
Prudent practitioners have positive reviews with clients. While the BBB is a fantastic place for finding legitimate debt management services, not all individuals make sure to file complaints if they do get scammed in some way. Conduct a standard Web search with the name of your prospective firm adding only the word review at front.
Check user-run consumer complaint websites from assorted business directories which permit consumer reviews among other initiatives. Commendable debt management services get listed with networks incorporating fellow industry practitioners. These organizations operate just as does the BBB. While they might not represent the government, such bodies are quite helpful, being designed to protect the interests of clientele. Their main function involves searching for ideal settlements, credit counseling and consolidation programs. One they come across a legitimate offer, these firms partner up with the concerned businesses and avail their contacts online.