• March 11, 2019
  • admin

Bad credit loans are notorious for unattractive interest rates. More often than not, you find your payment history extremely disappointing when you need a loan that results in getting money at high interest rates. Though these loans come with flexible terms and conditions, many borrowers struggle to pay the debt timely. There are two significant reasons for a large number of defaults: you have to pay the whole of the debt in lump sum, and interest rates are high that cause severe burden on your finances.

Most of the time, you find yourself unable to get rid of loan and as a result, either you ask your lender to extend the period of repayment or you take out a new loan to pay off the existing one. This results in a permanent circle of debt. Loan for bad credit with no guarantor can be a bit risky if you fail to settle your dues on time.

Some borrowers try to arrange a guarantor with a good credit score, but it is not as easy as it seems. The devil is in the detail. First off, arranging a guarantor within a short period is all but impossible. Secondly, no one tries to act as a guarantor because they will be liable to pay off the debt if you make any default and it will not only pull your credit score but also your guarantor.

As a result, you are left with one alternative - to have a good credit score. Most of the time, before you take out no guarantor loans, you look over your credit report to spot any error that may affect your score and try to settle some pending accounts with the hope of having a fair score to get the deal at lower interest rates. However, some factors do not help improve your credit score.

Your income

Whether or not you earn a handsome amount of money, your lender will not sanction the loan at lower interest rates. Income is undoubtedly one of the most important factors but it is taken into account to decide on your affordability. How much money to transfer to your account, depends on your income status only.

Remember that your high salary cannot elevate your score and low salary cannot ding your score. If you want to get a loan at lower interest rates, your credit report must be fair.

Rejection of your loan application

If you have been denied getting a loan, you think that it would have pulled your credit score, but this is a myth. Your credit report does not show any information related to approval or disapproval of your loan application. Your lender may run either a hard credit check or a soft credit check. The former shows up hard inquiries on your report and hence, it may pull your score. The latter does not affect your score. Make sure that you do not apply for multiple loan applications.

Paying dues of others

If you are paying bills and dues of your family member and friends, you can do it to show generosity. Do not think that this will improve your credit score in any way. Money lenders in the UK will approve your loan at lower interest rates if you settle your dues timely. It is crucial that you do not fall behind payments.


If you miss a repayment of your debt or credit card bills, your score will go down. Failing to pay your utility expenses can also take a toll on your credit score. In fact, overdue library books can ding your credit score. However, if you have withdrawn your checking account, you do not need to be worried about diminution in your credit score. It is not reported to your credit bureaus, but it does not mean that you will make overdrafts deliberately. Otherwise, you will have trouble in opening a new bank account.

Missed insurance payments

Your insurance company will consider your credit score to calculate insurance premiums, but it will not report your payments to credit bureaus, whether you make it timely or you miss it. If you fall behind your insurance premium payments, your insurer may cancel the policy.

The bottom line

If you want to get a bad credit loan at lower rate of interest, make sure that you make all your dues timely and do not apply for multiple loan applications in a short time. Visit Here: PersonalLoanLender.uk