What can you do if your bank refuses your request for a personal loan?
Many people applying for a George Banco Personal loan have been refused credit elsewhere and so cannot turn to the mainstream lenders. Whether the money needed is to resolve a financial emergency or a lifestyle change such as a home extension or conservatory, their options have become limited, despite having a steady income and confidence of being able to afford the repayments.
So what can be done to resolve the issue and to enable access to funds quickly? In this blog we will take a brief look at some of the remaining options for those with a less than perfect credit rating.
Pay Day Loans
The pay day loan is a type of personal loan that is designed to help the applicant get hold of a relatively small amount of cash to tide them over until pay day arrives, at which time the loan can be repaid with the agreed interest. Unfortunately the interest rate is often over 1000% and even if repayments are made on time, can still affect your long term credit rating. It can even affect the chances of getting a mortgage in the future. Read more about what you need to watch out for with a payday loan with the Money Saving Expert.
Credit cards are great if the duration you will be using the money for is relatively short and you can afford to repay the amount within 30 days. If not, the interest payable can start to build up and can result in simply compounding the problem being faced. In fact, many of our guarantor loan applicants have used part of their loan amount to repay credit card bills.† When the bills are coupled with any other kind of ongoing debt repayments, they can become unmanageable.
Friends and Family
Borrowing from friends or family is a useful option if you are lucky enough to have relatives that can afford to lend you a 4 figure cash sum, for between 1 and 5 years. Most people do not have that option so have to explore alternative opportunities.
Unsecured Personal Loans
Unsecured personal loans, ideal provided you have a strong enough credit score to complete the application process and can demonstrate you can afford the repayments. The interest rates are far lower than with a payday loan and the amount you can apply for is usually greater and over a longer period of time. This is a far more controlled form of borrowing which can, over time, help aid the rebuilding of a bad credit score provided repayments are kept up. You need to make sure which ever loan provider you consider is FCA regulated and check them out online, especially the customer reviews about the company.
Guarantor loans are another form of unsecured personal loan, with the difference being that another person has to put themselves forward as a guarantor. If for any reason the loan recipient defaults on the agreed repayments the guarantor will make the repayments on behalf of the loan recipient. This sort of loan requires a lot of trust between the guarantor and the loan recipient. The guarantor will need to have a fairly healthy credit score in order to be considered by the loan provider. It is another more controlled form of borrowing but one which can also help towards rebuilding a bad credit rating.
At George Banco there is also an additional feature with a personal loan or guarantor loan which is the Unique Rate Dropper Loan, whereby the interest rate can be reduced in year 2 and again in year 3 provided repayments are kept up and on time. To read more about the unique Rate Dropper Loan click here.
As you can see from the above options if the banks have said no to you having a personal loan, there are alternatives available. Apply online or speak to one of our representatives to find out more.