A personal loan offered for bad credit to customers is a bad credit loan. Its repayment terms are not fixed and hence it will suit the person who takes the loan. In a way it is like taking the first step towards rewriting your credit history. If the person is above the age of 18 and a permanent resident of the country, and who is employed, then he is eligible to apply for this loan. They may need to use it to pay for some important personal event.
The Options Available If A Consolidation Loan Is Not Granted
If one is applying for a debt consolidation loan, it will not be granted if you have debts to clear and also a bad credit history. The lenders do not think that you will be able to pay back. The only options available for you are Personal Insolvency Agreement or Debt Agreement. There are a few people who are ready to sanction a personal loan even with a bad credit history, but then you will be charged a high rate of interest. A few kinds of bad credit loans are payday loans, car loans and home loans
Other Options Available For Repayments Of Debts
A debt agreement is another option available for those who cannot pay back the entire amount of debt, but have funds to repay a part of it. If you are not able to get a personal loan because of bad credit history, this is a good alternative. All the debts are brought under one umbrella. All loans that are not secured like old utility bills, credit cards, personal loans, repossessed cars, will be pooled together. You are required to make one regular payment weekly, fortnightly or monthly. No legal action can be taken against you and there will be a freeze on the interest charges. Finally whatever you cannot repay is cancelled.
The Concerns Of Proposing A Debt Agreement
Since the person who intends a debt agreement, commits an act of bankruptcy which means that if the proposal is not accepted by the creditors, an application can be made to the court to declare the debtor bankrupt. The debtor’s chances of obtaining any loans even personal loans for bad credit will be affected since his name will be mentioned in the credit reporting organisation’s records and this will remain there for about seven years. Secured creditors can sell any asset that was offered as security in case of a default. The payments made towards unsecured creditors are only in proportion of their debts. Debt Agreement should be applied for, only if there is no chance of repayment of loans on time, otherwise debt consolidation is better.