Benefit of Installment Loans

The irony is that the only way to improve your score is to prove you can repay any money you have borrowed. But your opportunities for proving yourself to lenders are limited when you have a history of poor credit so many people are left feeling like they are stuck in this situation without a hope of improving their profile.

Luckily, there are now a number of lenders offering installments loans to those with bad credit to help them improve their financial profile. It’s important not to view these loans as “free money” however, particularly if it is your first time borrowing, and remember that you will have to pay it back with added interest.

If you can prove you have a steady, reliable income then your bank may offer you a personal installment loan. Your annual salary may need to be above a certain threshold, and you will need to give proof of your ID and home address, as well as give references to vouch for your character if you are a new customer.

If you have been with your bank for a long time and aren’t in a large amount of overdraft debt, they are more likely to give you a number of suitable options so you can improve your situation. They may suggest increasing your overdraft facility, taking out a credit card or applying for a personal loan.

You will need to consider your options carefully and work out what you can afford to pay back. If you’re simply looking to improve your credit score, start small by borrowing a minimal amount that you know you will be able to pay back each month. Missing repayments with have a negative affect on your score, which is the last thing you need.

If your bank doesn’t accept your application, there are still other options you can try. Bear in mind that each application this will have an impact on your overall score – a negative one if you are repeatedly refused – so try to leave some time in between applications to avoid this happening.

If you don’t have much luck with your bank, you could always try looking online for a personal installment loan. You will need to make sure you apply through a reliable lending source that can connect you with trustworthy partners that won’t take advantage of your situation.

Unfortunately, many lenders that advertise their services to those with poor credit will charge higher interest rates, meaning the borrower ends up with more financial struggles in the long run. In order to avoid this, look for lending companies that advertise low APR that ranges from 5.99% up to 35.99%.

Personal loans are normally for small amounts (as opposed to a mortgage, for example) but can be available up to £25,000.Don’t be tempted to borrow more than you can afford to pay back, as this will simply lead to you falling into debt and further tarnishing your record.

When you are taking steps to be approved for borrowing, your monthly repayments will be taken into consideration. Therefore, you shouldn’t be accepted for a larger amount than you can afford to pay back. It’s important to work out how much you can spare of your monthly income to avoid missing repayments – this way you will keep your score in the green.

 

Things You Need To Know Before Get Loan For Your Car

Most people who buy a new or pre-owned vehicle from a dealership choose to finance their purchase rather than paying cash upfront. While this makes financial sense for most people, making a mistake while negotiating the terms of an auto loan can end up costing the borrower a lot of money. Here are five tips to help anyone tackle auto lending like a pro.

1. Credit reports sometimes contain mistakes.

People with lower credit scores often must pay higher interest rates on loans, so anyone considering borrowing money should become very familiar with his or her credit report. Sometimes mistakes happen. These errors should be fixed before meeting with a lender. Some shoppers might even find that dishonest lenders may try to claim their scores are lower than they actually are. Being familiar with all three reports could give the borrower additional negotiating power and save a lot of money in the long run.

2. Shop around for the best deal on an auto loan.

Although dealerships often advertise low-APR specials, those rates are usually reserved for borrowers with the best credit. Many people will find better terms at a credit union or an online or community bank. If the borrower gets prequalified at a bank, they will be in a better position to negotiate at the car dealership without being legally bound by any agreement with the bank. Bonus tip: Any credit inquiries within the same two-week period will only count as one inquiry when affecting a report.

3. Some lenders will take advantage of subprime borrowers.

Some dishonest lenders will offer high-interest loans to drivers with poor credit, and as soon as the driver misses a payment, the dealership will confiscate the car and resell it. Defaulting on a loan will do additional damage to already bad credit, so borrowers should be sure they can afford payments before agreeing to a loan. Even subprime borrowers should shop around for the best APR. Auto lending requirements are usually lower than mortgage requirements, so shoppers should check to make sure they are getting the best deal.

4. Lower monthly payments might actually cost more.

One tactic sometimes used in auto lending is for dealers to advertise low monthly payments while concealing a higher total purchase. Lower monthly payments also lengthen the terms of the contract, and longer loans usually have higher interest rates. Shoppers should be sure to negotiate the total purchase price separately from the APR and monthly payment.

5. Read the fine print.

Before driving away in a new vehicle, shoppers should be sure that the auto lending process is complete. If the lender says that the deal is still subject to approval after you leave, they may call later and demand a higher APR or monthly payment, or ask that the car be returned to the lot. The fine print should also say that the APR is fixed; otherwise, it may go up, possibly making payments unmanageable. In addition, some dealerships charge penalty fees if the borrower pays off the loan early.