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Key Questions To Ask Before Taking Out A Bad Credit Personal Loan
7 Sep 2018

Key Questions To Ask Before Taking Out A Bad Credit Personal Loan

Are you thinking about applying for a bad credit personal loan? If you’d like to borrow money, it’s essential to make sure that you have all the information you need to make a well-rounded decision. Before you sign on the dotted line, here are some key questions to ask:

Is taking out a loan the best option for me?

Before you borrow money, ask yourself if this is the only option available to you. Do you really need to take out a loan, and is a bad credit personal loan the best option for you? Could you get by without borrowing money? If you need cash now, and a loan is the only avenue open to you then you can move on to the next question.

Which type of loan should I apply for?

There are many different types of loan out there, even for those with bad credit. Before you submit any applications, make sure you understand the difference between loan types and do some research to ascertain what kind of loan would suit you best. A payday loan may be ideal for short-term cash-flow problems, but this is unlikely to be the best remedy if you need to borrow a large amount of cash that you plan to pay back over a prolonged period of time. Weigh up your options, seek expert advice, and always shop around.

How much am I borrowing versus how much am I paying back?

When you take out personal loans, it’s very easy to focus on the value of the loan, and forget about the total you’re actually paying back. It’s crucial that you’re aware of the total amount before you agree to accept that offer.

Are there any fines or penalties for early payment or missed payments?

Every loan is granted on a conditional basis. If you don’t meet the terms of the agreement, there are likely to be consequences, and this is why it’s so important to read the small print and make sure that you understand exactly what you’ve signed up for. Many lenders will charge fees for early payment, and there are likely to be penalties for late or missed repayments.

What do I need to apply for a bad credit loan?

Bad credit loans are generally available to UK adults who have a full-time job and a verified bank account. In addition to proving your identity, you may need to provide financial documents and proof of employment and income. There may be different stipulations based on the lender you choose. It’s a good idea to check what kinds of documents you need and read the eligibility criteria before you start an application.

 

If you’ve decided to apply for a bad credit loan, it pays to gather as much information about borrowing money as possible. If you’re keen to explore your options, Bonsai Finance can help. All you have to do is visit the website, enter some details, and you’ll be presented with personalised results. Compare lenders, look at different types of loans, and always make sure you read the terms and conditions.