In the current climate, with the banks tightening their lending criteria in response to their increasing bad debt levels has fueled the public’s hunger for doorstep cash loans. This is hypocrisy, as some analysts blame the banks for being the source of this problem in the first place. Whilst UK consumers are stretched to the hilt, banks are focused more on the cross-selling of products to their existing customers. New customer acquisition has taken a back-burner.
It’s a vicious circle of the blame game with banks claiming that have to struggle with the high levels of unpaid personal loans, and point the finger at higher interest rates and IVA companies for their debt mountain. IVA companies accuse banks of creating their own problem by lending to high risk borrowers; and the blame cycle continues, but the only real victim is in fact, the borrower.
If you find that you can’t get credit from the high street banks, it can be hard to get the cash that you need. You may think the best option is to find loan sharks online, but then you’re not alone, with approximately two hundred thousand people in the UK using loan sharks in the UK, today. But, instead of being forced to make costly repayments, there is now another option for you if you need loans for any purpose – these are sub-prime or unsecured loan lenders.
The sub-prime sector has been making great strides to venture into the mainstream, even before the recent financial crisis. The days of the murky back-street dealings with loan sharking were thought to be a thing of the past. Though in some financial circles, ‘sub-prime’ may be seen as a dirty word, it’s important to remember the fact that in the UK, no problems have come to the surface that are like that which have been seen in the United States.
Many unsecured lenders and intermediaries in the sub-prime loans market lend to customers with either self certified incomes (for example, the self-employed or on government benefits) which explained why consumers had to certify their income. Even borrowers with a poor credit score have access to huge number of lenders who are regulated by the Office of Fair Trading and the Financial Services Authority. Sub prime customers are better served than in the past. Borrowers with debt problems are no longer forced into the dangerous hands of loan sharks.
Having a credit history with County Court Judgement’s registered against it, can have an affect your ability to get a loan. Whilst the amount of poor credit history accepted by each lender may vary, they will ultimately look at the number of defaults, months in arrears and dates of CCJ’s in order to asses whether the borrower has tried to improve their situation.
A CCJ is a judgement reached by the County Courts, typically for debt that’s outstanding. Any CCJ’s registered against you, will appear and remain on your credit record for several years. Many high street lenders avoid these types of unsecured loans as they are higher risk, but there are still lenders who can be considered, which is why they have higher arrangement fees and higher interest rates.
Credit companies that offer bad credit loans can arrange finance for people in the most difficult of circumstances. Most of their loans can range anything from £100 right up to £5,000. They deal in bad credit loans and can help, whatever your past credit problems have been, including CCJ’s, arrears, IVA’s, bankruptcies, a repossession order, etc. Many of these are independently run finance companies that offer loans to UK consumers. Some are family run and have been lending to the local community for decades.