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If your loan application is recently rejected owing to bad credit score, it is important to understand what does bad credit entail? For, poor credit condition extensively limits your borrowing options. It indeed makes borrowing expensive and unaffordable. And thus it is inadvisable to let the bad score mar your report for an extensive time period.

Your past credit history and ratio of debt utilisation primarily define your credit score. The score below 500 points is considered as a low score and makes an individual less credit worthy for loans and credit cards. Thus anyone who is near or below this mark should take regressive steps to improve the score. However mending the score can take more than six months.

In the meantime, if you seek guaranteed loans for bad credit it is important to understand what your options are and how to make the best use of the available choices. Being a person with poor credit worth, not too many lenders would be willing to extend loans to you.

How to find the reliable lenders with bad score?
You can consider using a professional help. For, conventional lenders would not come to help you. You can look online for FCA registered loan brokers with rich experience in helping bad credit borrowers. The brokers are not loan sellers. They are mediators who have contacts with the active lenders. You simply need to fill a form on their website and they would guide you by locating the closest match loans. Most of the lenders do not charge the borrowers and thus it is one of the most convenient ways to search for available deals in the UK.

Know your options:

When you need quick loans for emergency or unprecedented expenses, you can apply for payday loans. For these loans are readily offered to bad credit borrowers despite the credit issues. These small cash loans are swiftly directed to your bank account on approval. However the convenience of a quick loan comes at a high cost and you would be required to reimburse the amount on your next salary day. The roll over cost for payday loans is exorbitantly high too. Thus you should be really wary about using payday loans.
If you do not want to make a hole in your pocket due to bad credit score, consider using secured loans. You can use your home equity to avail homeowner loans for poor credit. Using your home, you can avail a fatter loan at a better price. Even those who have a current mortgage can use a second charge as a homeowner.

However before applying for a loan against property it is important to get ready for the repayment of the loan. For a loan against property would also risk your stakes in case of nonpayment.
For those who do not have a home equity or do not want to use their assets for loans shall look for unsecured loans for people with bad credit. Being a homeowner, a broker can help you locate a personal loan without using collateral. The rate of interest is high but there is no risk to your home ownership.
Knowing your options, you can make an informed decision weighing all pros and cons of a loan product.

Are you thinking of buying a car? Is your decision tilting towards buying a new car? Before you head out to make a purchase, do give a thought to the other option. Buying a pre-owned car may not make for an appealing choice; but makes sense financially.

Stay away from the New; Go for the Used Cars

Who doesn’t love the new car smell? You may have set your eyes on a new car but here’s why you should head to the used car section at the dealership.

Buying a New Car becomes Expensive every Year
Even though there are several affordable car models, buying a new car and keeping it is becoming expensive year over year. Obtaining an auto loan for buying a new car is resulting in higher monthly payments than before. According to Experian’s Q1 2017 data, a sub-prime borrower spends $519 on a new car loan. And, if he seeks a used car loan, it comes down to $385. So, it makes sense to buy a used car.

Loan Terms are getting Longer
Lenders charge high interest rates from sub-prime borrowers. But, they try to cover the high rates with longer loan terms. If you wish to buy a new car with super-prime credit, the lenders will offer a loan term of 62 months. And the term is 72 months for deep subprime car borrowers. For a used car borrower with deep-subprime, the term is 65 months. Remember that used cars are less costly which means you will make smaller monthly payments over the years. But, when you buy a new car with a long term, you end up paying more in the form of interest.

The Risk of Negative Equity
Constant rise in monthly payments and long loan terms spell a recipe for disaster. A new car loses value as soon as you leave the dealership lot. And, the lenders direct initial payments towards the interest amount. It means the amount you owe to the lender becomes higher than the value of your car. Being in an upside down loan situation is very risky proposition. If the car is totaled for some reason, you will have to pay the difference between the insurance money and the pending loan amount. So, consider choosing a used car because of its low value and low depreciation rate.

Let your Brain take the Lead!

Buying a car is an emotional experience. You may adore a brand. You may have set your heart on a certain car model. But, remember that a car is the second biggest purchase of your life. If you listen to your heart and disregard cognitive thinking, you will face bad credit score and unpaid debts in the future. So, consider your financial condition, credit score, and cash availability before buying a new car. If you think that higher monthly payments will put an unnecessary burden on your financial condition, go for a used car. Listen to your brain and make a practical decision.