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April 15, 2020April 17, 2020General

Can I use Bad Credit Loans to Pay for a Holiday?

Any holiday can be expensive but they can be really great and many people like to have one every year. They can help us to relax, give us vital family time and give us the chance to do new things or explore new places. Even if we just do something very simple, such as going camping, it will take some money and this is something which we may not have. We might consider taking a loan out to pay for it. Although this can be a good idea, it is worth making sure that we think it through first Whether we need to use a bad credit loan or any other, we should still consider the same things.

Is it worth the cost?

It is worth checking whether you feel that the cost of the loan is worth it. It can be really easy to forget that a loan will cost us money and that we will need to make sure that we are happy with that cost. The loan cost is also not always that easy to find out. We might be aware of what the interest rate is but that does not really help us to calculate the cost. Therefore, it can be worth finding out for sure how much you will be expected to repay in full and this will help you to be able to decide whether you feel the loan is worth it.

You will find that different types of loans cost different amounts and different lenders also differ in how much they charge. This means that you could end up comparing a lot of loans. It is worth doing though as knowing what you might expect to pay and what the lender you like is charging can be really useful. You will then be able to decide whether you think certain loans will offer you good value for money.

Can I afford to repay it?

It is also really important to make sure that you work out whether you can afford the loan repayments. This means that you need to do two lots of calculations or research. You will firstly need to work out how much the repayment(s) will be and when they need to be paid. Then you need to work out whether you will be able to afford that. Often with a bad credit payday loan, you will find that you just make one repayment. This is set up to go out on the day that you are paid, which should mean that you will have plenty of money to repay it. However, it is really wise to make sure that you will have enough money. You will need to think about the fact that you will have other things to pay for as well. If lots of payments go out on that day then you might be short of enough money to pay back the loan or to pay those other things. Even if you do have enough money, you could find that you will not have enough money to pay for everything else that you will need. This will mean that you could struggle to pay for food or other essentials.

It is therefore worth doing so thorough calculations. You might find that you will be able to reduce spending in some areas so that you have enough for your essentials. You may also find that you will be able to compare prices on some of the things that you buy and save money by paying less for them. These sorts of small changes could add up to be enough to allow you to afford the repayment.

Will borrowing stress me?

Sometimes people find the idea of borrowing stressful. It could just be owing money or the worry of repaying. If this is the case with you, then borrowing for a holiday could mean that the holiday gets spoiled because of the stress. Some people do not worry about things like this so it will not be a problem. However, think about how it might be for you and then you will be able to decide whether you think it is something that you could try or something that you might be better off avoiding.

So, using a bad credit loan may or may not be a good idea. If you want to use it for a holiday, the only other thing that you will need to consider is whether you will be able to borrow enough money. A bad credit loan may not offer you a great deal of money so if you have big plans then it may not help. However, if you have a modest holiday planned, then it might be enough money for you. It will be important to find out how much you can borrow and how much the holiday is so that you can check this out for yourself.

April 15, 2020April 17, 2020Credit Scoring

Will Bad Credit Loans Damage my Credit Score?

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It can be a concern at times that our credit scores may not be as good as they should be. You might also worry that certain things that you do might affect them. It is right that our behaviour effects the credit score but it can be quite complicated to work out how it will do so. It is good to have an understanding of what a credit score is and what might change it so that you can decide whether a bad credit loan might be a good or bad idea.

What is a credit score?

Your credit score is not actually something that exists. In the UK we all have a credit report which will have details of our finances. It will include things like our employment details and what we get paid, loans we have had in the past and whether we repaid them. Any outstanding debt we have and what regular payments we make such as for contracts or utility bills.

Each lender or company that wants to look at your credit report will do their own calculations as to whether they feel that they want to lend to you. They will all have their own criteria to judge you on. For example, some lenders will not want to take on anyone who has bit repaid loans on time in the past even if they eventually repaid it all. Some will be happy to take on someone who was late with a few payments but manage din the end to repay as they feel if they miss a few payments they will be able to charge them more and make more money out of them. Some might not take on people who have not borrowed before as they cannot show they would be capable of repaying.

Therefore, it is very hard to judge exactly what you can do to improve your credit score. it is obviously a good idea to make sure that your credit report is correct and that you have no long term outstanding debts though.

How do loans affect it?

When you apply for a loan, the lender will take a look at your credit record. This will allow them to decide whether they feel they would like to lend to you or not. They also leave behind a trace which will show that they have checked it. This means that other lenders will see that a lender has looked. Sometimes lenders get put off if someone has had a lot of lenders look at their credit report in quick succession as it could be an indication that they are desperate for money and therefore potentially having financial problems.

If you take out a loan it will also show up. However, if you are making regular repayments as per your loan agreement, then this could work in your favour as it will show that you are capable of making the repayments. However, it will also show that you have one loan and so a lender may wonder whether this will make it difficult for you to manage the repayments on an additional loan

How do bad credit loans affect it?

If a bad credit lender does a credit check then they will do a soft credit check which does not leave behind a trace. Therefore, no other lender will know that they have looked at your credit report. This means that there will be no judgement where this is concerned.

If you do take out the loan it will show up. If you repay it as required then this could go in your favour. It will show that you are capable of making required loan repayments. However, if you do not repay it as required then this will not look good.

It is possible that a lender may judge you negatively if you have taken out a bad credit loan. There is the chance that they might feel you did because you could not get money elsewhere or because you needed the money really quickly. In either case they may see that as a negative thing and even if you repaid it in full they may use it against you. It is very hard to know though, as lenders do not let people know the criteria that they judge on. This means that using a bad credit loan, or any loan in fact, could be used against you or in your favour and you have no way of knowing. The only thing you know for sure is that if you miss lots of repayments, this will be held against you. Therefore, it is probably wise not to get a loan just to improve your credit rating as it might work against you. However, if you do need a loan, do not avoid it because you are worried about your credit rating but do only take it on if you are confident that you are able to repay it.