Cash is always a king. Be it a small business or an individual, positive cash flow is always desired. However, with falling credit score falls your credit borrowing capacity.
Most people realise the importance of credit rating only after their loan applications are rejected. If you too have been denied access to loans by one of your banks, it’s time to take a call. You should never apply to multiple lenders following a loan rejection. Each negative response would bring a red flag to your credit report and further diminish your credit eligibility.
As we find ourselves struggling to locate appropriate cash loans we tend to feel financially broken. Here is a list of quick pointers to outline Do’s and Don’ts for borrowers seeking cash loans with poor credit rating.
- Do assess your credit accounts
Before raising additional loans for your dilapidated credit situation, it is important to assess your credit situation. You need to keep a check on your debt to income ratio and limit your credit utilisation ratio. By assessing your report, you can take steps to change your credit profile and close very high-cost loans with greater ease. The additional loans should be planned in sync with your current accounts only. In case you are looking for urgent cash loans, you must carefully assess the impact of additional loans on your credit profile.
- Do use a professional suggestion
Many individuals find it difficult to assess their credit account on own and seek help in their peer group. Herein it is recommended to use a professional’s suggestion and take some practical steps in the direction.
- Do negotiate and save on interest rate
Always try to save as much as possible on the cost of the loan. You can consider negotiating interest rate before signing the final deal. Most brokers do the negotiation part quite meticulously, nevertheless, it is recommended to ask again and save on the interest component.
- Do have a backup repayment plan
Whether you plan a payday loan or doorstep loan or a short-term instalment loan for your instant cash requirements, it is important to have a clear repayment plan. A broker can help you in your endeavours.
- Do not borrow as cash gap loan
With poor credit rating, every additional credit should be planned carefully. You should not borrow as a cash gap loan. The loan should be raised only for pressing needs.
- Do not borrow more than what you need
Irrespective of the amount quote available in the market you should only borrow as per your needs. You should never borrow more than what you require.
- Do not fall prey to marketing gimmicks
Despite strict vigilance by FCA, many Loan Sharks are active in the UK FinTech market. You should carefully read all terms and conditions and never fall prey to the tall claims by such unscrupulous companies. Using a broking service, you could rest assured of dealing with professional companies only.
- Do not borrow for long term just to keep instalments low
While deciding the loan instalments, make sure you keep the duration low. Raising the term of the loan to keep low instalments is not a smart move with poor credit rating. Short cash loans come at an additional cost and thus you should always assess the overall impact of your borrowing decision on your financial situation.