If you have applied for a loan and your loan application was refused it probably was because the lender doubted that you can repay the money you have borrowed. But the loan company is obliged to tell you the reasons why they have turned you down, and you can ask for information.
If the unsuccessful application for your loan was the result of information given by a credit reference agency and you never had any financial difficulties it is worth checking your credit history to find out if there are any errors.
But what to do next if indeed one-s credit history shows up some problems?
The first thing you do should to is carefully reconsider your financial situation and find out if any other solution would be possible, like for example asking a relation good friend to lend you some money or possibly doing without a planned purchase. To keep re-applying for a new loan when it likely to be refused again could be of little benefit, as this will only show up on your credit file. Before facing serious debt it is advisable to take advantage of a free debt advice, like it is offered for example at the Citizen Advice Bureau.
Is it possible to borrow some money even with a bad credit history?
There are loans available which are specially designed for anybody with a bad credit history and who has been refused by lenders. These so-called bad credit loans can be found on financial websites. There you enter your requirements and most likely will find something which suits you best.
For the lender you will mean a higher risk, this is why the interest on a bad credit loan usually is higher than for personal loans. There are secured loans available and unsecured loans, and some bad credit loans can be secured against a car or even your house. This is particularly useful if you need a bad credit loan as the car loan – but in the worst case the lender can seize your car.
What can I do if I need money very urgently?
If you need cash very quickly you can apply for a payday loan. A payday loan can be taken out for small amounts, and usually have to be paid back within one month, at the next payday. They are a useful solution if you have to be able to pay for an unexpected bill or need to pay quickly for something like for a car repair or a medical emergency.
A payday loan can be applied for by people who are over 18, a UK citizen, are employed, and have a valid bank account.
A full credit check for a payday loan is not usually carried out. The payday loan terms vary a lot, but often they will be two weeks. Payday loans are useful in a financial emergency but will be a lot more expensive than any other personal loan. Before taking out a payday loan it is very important to make sure not to end up in the hands of a loan shark, who only uses a vulnerable situation of other people for his own advantage. On an independent financial website it is easy to compare different reliable payday loan companies and directly apply for the payday loan which suits one best.
How to I handle existing debts?
If you have several loans you can, instead of paying off your loans to several loan companies, combine all debts into one monthly payment. A so-called consolidating loan makes it possible, to pay a lower monthly sum over a longer time span. This doesn-t mean you suddenly will owe less money but your finances will be simplified with the help of a consolidating loan and more easily managed.
A consolidation loan means less stress because you only have one loan to deal with, and if you have taken out a payment protection scheme you will be safe in the event of an unexpected job loss or illness.
Like with any other loan it will be important to shop around before applying for a consolidating loan. The best consolidating loan will be found by comparing different lenders. Here again, a good financial website is of greatest help.
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