Maybe its to buy a shiny new car or to have the house redecorated, or maybe its to consolidate crushing debts, bring the monthly payments down and try and get a normal life back?
Unfortunately from our experience the need for longer term borrowing options are not normally for the nice things in life, but to make the best of a bad situation:
- Emergency house or car repairs
- Debt consolidation to bring down the cost crushing smaller debts
- Help to fund a business (we all know banks are not lending anymore!)
We are acutely aware that with a poor credit rating; your options to get finance are limited and the high street banks are just not interested.
Though having said that since the credit crunch in 2007, there has been an explosion of ‘sub credit’ lenders – some good, some bad, some downright terrible!
So if you are thinking about a longer term option and have a dodgy financial history, then we would suggest considering the following points borrowing any money:
1. Avoid borrowing more money than you have too
This might sound really obvious, but the more you borrow, the more you are going to have to pay back!
Its a fact that this type of borrowing is more expensive, so therefore you have to be really careful that you do not over stretch yourself and can comfortably afford the monthly re-payments.
A longer term option with comfortable monthly payments should be a route to solving problems; not a way of getting you further into debt storing up bigger issues for the future.
We would recommend thinking about the absolute minimum you could get away with borrowing; and only apply for that amount.
Let us not bankrupt our todays by paying interest on the regrets of yesterday and by borrowing in advance the troubles of tomorrow.
2. Avoid options with monthly payments you cannot comfortably afford
One of the main mistakes people make is over estimating the amount they can afford per month and under estimating unexpected expenses and ‘things that come up’!
The result is often a new monthly repayment that means once again the money is running out before the end of the month!!
Your goal should eventually be to have spare money at the end of the month; so in the future when those large unexpected expenses to turn up, you have the savings to pay for it; so a long term option with monthly payments you can comfortably afford is the first step towards this.
Not being able to afford your monthly re-payments can be a cause of massive stress and a huge burden.
Check out our our Calculator to find out how much our loans could cost you.
3. Avoid borrowing from a terrible bad credit lender!!
Unfortunately there are a number of lenders and brokers out there who are not interested in what is best for the borrowers long as they can lend and get a maximum return then that all they are interested in.
Since the explosion of new lenders, many people have been subjected to huge fees, charges, interest rates and aggressive tactics.
To avoid this we highly recommend taking a bit of time and shopping around for the best option.
For more tips on responsible borrowing, see www.investorwords.com article: