Bad Credit Guide to Avoiding Concealed Loan Dangers
by Bad Credit Loans 4 You
So many UK families are now having to face up to bad credit problems, but are unsure of the options and what’s best for their circumstances.
If you are in need of financial assistance and need bad credit loans, it’s important you are aware of some possible dangers before signing on the dotted line.
Our bad credit loan guide below highlights the bad credit loan opportunities available to you and what risks are associated with them:
Payday Loans / Cash Advances
The number of people in the UK obtaining payday loans has increased by 241% over the last four years, from 1.2 million in 2006 to 4.1 million in 2010.
Payday loans are short-term loans of small amounts which are usually taken out and then repaid over a few weeks or a couple of months.
They are called Payday Loans because of the loan requirement to ‘see you through’ to payday and then split the repayments of the loan over subsequent paydays.
Payday loans can be helpful to people who come across bad credit problems and need help in a short space of time, but they also come with exorbitant repayment rates.
Many of the biggest companies in the payday loan sector offer bad credit loans from £80 to £750 at a typical rate of 1,355% and up to 2,500% for some companies.
Beware also the real sting comes if you cannot pay off the loan at the agreed date, as PayDay Loan companies charge for reminder letters etc. just as the high street banks do and at the same high cost.
During the recession demand for Payday loans soared, with many people finding they came up short on increasing bills.
Those people with bad credit who believe that a Payday loan will offer a quick fix should be wary of the temptation of a Payday loan as it can leave you in further need of bad credit loans to keep up with repayments.
'Cash for Gold'
Consumer group Which? is one of the latest companies to warn against internet and TV advertisements from organisations offering to purchase your unwanted gold.
Many of them are paying a fraction of the items true value, only 6% of the retail price, whereas high street pawnshops would offer around 25%.
Handy Hint: In order not to get caught check the price of gold on the internet and then pop your gold into an envelope, take it down to the post office and weigh it on their scales and do your calculation, you therefore know roughly what you should be offered for your gold. The same applies for silver.
Pawn Shops
Although it depends on the items you have for sale and the pawnshop you use, generally the customer receives 20% to 50% of the cash value.
However, monthly interest must be paid for up to six months which can account for a typical APR rate of 85%.
Doorstep Lenders
Doorstep lenders offer those with bad credit and on low incomes a possible solution to their bad credit loan needs which are no longer available from their bank or building society.
Doorstep loans are not entirely dissimilar to payday loans, both generally being for small sums which are borrowed over short periods which attract large interest rates.
Bad credit borrowers repay their bad credit loans to a local agent who calls at their home on a weekly basis.
Doorstep lenders came under fire from the Competition Commission in 2004 for failing to offer competition and giving little incentive to borrowers to repay their loans early.
Consumer groups are concerned about Government scrutiny of the doorstep lending sector.
They are concerned that if these types of bad credit loans are banned then there is a chance it will go underground and create more loan sharks.
Loan Sharks
Loan sharks lend unlicensed bad credit loans to vulnerable people at high and often undetermined interest rates.
Many people across the UK have fallen into a loan sharks trap, some have received threats of physical violence or have been harassed into borrowing more to repay their debt.
If you have borrowed bad credit loans from a Loan Shark then you are not legally obliged to repay the debt, but you would be advised to contact your local Trading Standards office for advice.
Credit Brokers
Although not a traditional channel of borrowing money, credit brokers often provide specialist services within the bad credit loans sector.
A credit broker may charge an upfront fee depending on the bad credit loans service you require, but you benefit from expert knowledge of the bad credit loans market.
Instead of blindly searching for bad credit loans yourself, a broker will be able to use the details you provide to select companies that should provide assistance.
Over preceding years, some credit brokers have developed a bad name for other organisations, but recent guidelines have been introduced to shake up the industry and return it to the top of the bad credit loans assistance table.
Weekly Payment Stores
These companies offer bad credit loans options in similar ways to hire purchase agreements.
You are limited to choosing from a range of items which they have on offer and then pay it off weekly.
These companies offer low weekly repayments, but usually extending the repayment periods, meaning you pay almost three times the items initial cost.
Car Finance
Although car finance can be particularly tempting, it does limit you to the car which the dealership is offering.
Many companies will also no longer offer car finance to those with bad credit problems.
It’s important to remember that the car finance company owns the car until you pay the last instalment, so if you fall into bad credit and miss payments, you risk losing your car.
Store Cards
Store cards lurk at the tills of every major store, offering tempting deals to those who sign up.
They are specifically designed to keep you spending at that store and the APR’s attached too them are often very steep.
Credit Cards
Credit cards are making a bit of a comeback following a shake-up over the way payments are allocated to your account.
Some very good deals about at present offering interest free balance transfers etc. But you need spotless credit history to be accepted for these deals.
Bad Credit Loans 4 You helps out people who fear they have been blacklisted because of CCJ’s and Defaults.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
For help, phone 0800 011 4503 or visit
http://bad-credit-loans-4-you.co.uk/loans-for-bad-credit.html
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Notes for Editor:
http://bad-credit-loans-4-you.co.uk/bad-credits-loans.html
Loans 4 You of London Ltd
Innovation Centre
Monks Brook
PO30 5WB
United Kingdom
Tel: 0800 011 4503
Bad Credit Loans 4 You was formed in April 2010, bringing together a team of specialists that together offers over 50 years of expertise to help applicants gain the unsecured loans they need.
From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing loans for people with bad credit. Bad Credit Loans 4 You can also assist with Student Loans even with Bad Credit and Private Student Loans.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
Bad Credit Loans 4 You has a senior management team with over 50yrs collective experience providing vital knowledge of the bad credit loans sector & helping those with CCJ’s, defaults, late credit card payments, mortgage arrears & other bad credit rating problems.
Our mission is to aid people who have been discriminated against because of their bad credit loans problems. We assess bad credit loans applications on your current budget and ability to repay bad credit loans, not just your bad credit rating.
