Being smart about borrowing money
If you need to borrow money then before doing anything, decide exactly how much, for how long, and precisely what the loan is going to cover. It would surprise most people to learn that a lot of borrowing money is done at the last minute and frequently for the wrong amount. It may seem odd to say that you need to plan how to borrow effectively, but it makes sense if you consider the advantages; no signing up with bad companies; the best interest rate, a loan that is affordable and flexible.
The thought of borrowing from family horrifies some, but it is advice given to start-up business; the reason being that family members charge low interest and are flexible about the loan terms. Before you borrow money, check your credit report, available on a free trial from several companies.
how to borrow money if you are in debt and have a poor credit report
If your credit report shows you to have a poor rating, which you probably suspected, do not panic. First step, check all the details are actually correct, you would be amazed at how often financial institutions make mistakes. Any errors, write to the credit agency and ask them to make a correction, and a note to the report. Next, look at what parts of your report are giving you the bad rating; usually if you have missed payments on a loan, several times, or are more than three months behind in payments. Consult a debt counsellor but not one you pay for. There are plenty at the Citizens Advice Bureau.
You may be able to take out a loan especially for those with bad credit to consolidate all your debts into one affordable payment. It might seem foolish to borrow money to sort out previous mistakes you made when borrowing money, but you are trying to reduce the cost of your debt. Take a look at credit cards that help repair your credit rating; only get one if you can trust yourself to clear the balance each month.
The ugly side of borrowing money – lenders to avoid
Sometimes people are desperate, and they make poor decisions under that sort of pressure. Banks may be universally loathed at present, but they are at least regulated, and you do have some redress against their bad practice. Online lenders can be a mix of the good, the bad and the downright ugly; the loan shark.
There are people who will lend you money when you have a really bad credit rating, and they expect their pound of flesh in return. They will charge extortionate interest rates, and each time you miss a payment the interest rate or penalties increase. These are the people that come knocking with a baseball bat when you fall behind on your payments. There may be some stigma attached to going bankrupt, but it is preferable to broken legs! Borrowing money need not be a bad experience if you follow the good rules of how to borrow money sensibly.
|Top Articles – Click to read more|