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What is a bad credit loan?
This is a loan for people who have experienced financial difficulty in the past such as late or missed payments; County Court Judgements (CCJs) and Arrears etc. You will be deemed as having ‘bad credit’ and could find it difficult and expensive to get a loan. However, there are sympathetic lenders who will provide you with a loan even if you do have bad credit, hence the term ‘bad credit loan’.
What is a prime lender?
Prime lenders are suitable for people who have an excellent credit history. Prime lenders typically offer the lowest interest rates and the lowest fees for borrowing, subject to you meeting their criteria. If you have late or missed payments on other credit within the last six years, it is unlikely that you will be accepted by a prime lender. If you do get accepted and your credit history is less than perfect, then you will probably pay a few percent more than your contemporaries with an excellent history.
What is an arrangement fee?
An arrangement fee is something that is charged by a lender or broker when you take out borrowing such as a loan or mortgage. It is to cover their costs in arranging the lending. Some lenders will offer this free of charge in order to attract new customers.
What is a credit score?
A credit score is a method that potential lenders use for calculating the credit worthiness of an applicant. They will look at the applicant’s credit report, the information on their application and the actual borrowing required. They will then use a mathematical scoring system to evaluate the amount of "risk" involved in lending to the applicant.
What is a bad debt?
A bad debt is borrowing where the money has not been paid back subject to the terms and conditions of the lending agreement. A debt tends to become ‘bad’ where it is unlikely that the creditor will be able to recover the money.Having a bad debt on your credit file will make it harder for you to borrow money in future.