Once you buy a property and are approved for a mortgage, your credit score and credit history is usually at an all time high.
You qualified and were approved for what many of us will be the largest loan we will ever need, a mortgage.
Properties today can cost well over £100,000, even in some of the less expensive parts of the country. If you want to live down south, or in London, you can be looking at hundreds of thousands of pounds to buy a property, even a small flat.
So being approved and getting a mortgage requires good credit, affordability, and also a good deposit.
Once you are approved for your mortgage and move into your new home, all you need to is to pay the monthly mortgage payments and all is well.
However, sometimes life has a way of making things difficult.
There we are cruising along with our jobs, and life, and nice house, and we may face redundancy, or a health issue, or any other of a number of reasons that we may find ourselves financially struggling to pay the bills.
If you miss a mortgage payment, or get in arrears with your mortgage, getting caught up on the payment is a huge challenge, and the damage it can do to your credit score is just as huge.
Even if someone does face a financial challenge, and maintains their mortgage payment, they may still struggle with other accounts and bills; which can also affect their credit history and credit score.
Then later, when you are back on your financial feet and may need a loan, it can prove difficult to be approved as now you have a low credit score and a bad credit history.
What loans are available to homeowners with bad credit?
There are a few options available:
Payday loan are short-term small loans with a high interest rate/APR. These loans are for people with bad credit, and who require a small loan of a few hundred pounds, and can repay the loan on their next pay period.
These loans are based on affordability, and the fact the borrower has a job and a bank account.
The downsides can be they are small loans for a very short period of time (30 days), and carry with them high interest rates of 1500% to over 2000%.
These are loans for homeowners who may have equity in their property. The loan is secured against the property, and the lender will only lend a certain amount against the equity in the property.
For example, if a person owns a house worth £150,000, and only owes £120,000, they have £30,000 equity. A lender may only lend an amount that is a portion of that equity in the form of a loan, and again the loan is secured by the property.
Should the homeowner struggle to make the repayments, their home could be at risk.
Guarantor loan are approved based on affordability and also the fact there is someone guaranteeing the loan.
The loans are not secured by the property, so there is no risk to the property.
The loans can be for longer terms than a payday loan, and have much lower interest rates, so payments can be more affordable.
Buddy Loans is a direct lender £1000-£7500 +441618504141 Alexandra Court, Carrs Road, Cheadle, SK8 2JY rated stars by Trustpilot.com based on 1128 merchant reviews
Always helpful, reliable and will go out of there way for customers, never had an issue an this is my second loan with them Same great service each time!
Great Company, the communication from start to finish was great, my loan was quickly approved and I received the full amount within 48 hours. I highly recommend Buddy Loans to anyone looking for a guarantor Loan.
Great customer service
I dealt with 2 people mainly and they were soo helpful. Couldnt ask for better customer service.
Very helpful, everything was explained to me and I was asked if I understood each step. Good communication and all callers very friendly. The loan will take a lot of worry off my daughter and I was happy to be her guarantor.
I found them very polite and helpful, they quickly and efficiently sorted out my loan and kept me up to date with its progress. Daniel in applications was brilliant as was Paul in the underwriting team. Thoroughly recommend them!!
Prompt and fast payout
A very professional firm with very little paperwork involved all done and completed within a week. Faultless.
I was a guarantor
These were great. Polite, professional and had a genuine concern to ensure all was explained. I was the guarantor for a good friend and know these guys helped him so much.
Excellent friendly helpful service
Every person I spoke to was very friendly and helpful and they were very knowledgeable about their product would recommend to anyone looking for a loan
Amazing service and very easy and simple process
Amazing service and very easy and simple process. Thank you very much. Would highly recommend. Staff were great very friendly and very informative about everything
From the initial application online right through to the pay out team, brilliant! Easy online application followed by a prompt call back. The whole process was explained thoroughly by a friendly team. Can't thank Buddy enough!!
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Representative 49.9% APR.
Terms and Conditions apply. Suitable Guarantor required. All loans are subject to status and affordability checks prior to approval. All applicants must be 18 or over.
Minimum period for repayment: 12 months | Maximum period for repayment: 60 months | Minimum APR 49.8% | Maximum APR 49.9%
Representative example: Amount of credit £3,250 for 36 months. Interest (fixed at 41.16%): £2,464.57. Total amount payable of £5,714.67. Representative 49.9% APR (Variable). 36 repayments of: £158.57.