These loans are often used for vehicle purchase or debt consolidation. Because the interest rates are high, managing the repayments can be tough.
If you have a guarantor loan, please read this page.
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Banks offer low-cost loans. The rates start as low as 3% APR. If your credit rating is poor, banks will not lend on these cheap terms.
Other lenders have stepped in to provide a service. Certain lenders issue large loans with high interest costs. Lenders are providing credit at 80% to 90% APR. This credit is available to those with imperfect credit scores.
Larger loans come with a repayment period of at least twelve months. More often they run for a number of years.
They get widely advertised. You may have seen promotions from Likely Loans, Everyday Loans, or 118 118 Money? Other providers have large marketing budgets.
These loans are expensive. They’re also dangerous.
You’ll pay back far more than you borrow. The monthly payment level is high.
It doesn’t take much to go wrong before the loan becomes unaffordable. If it’s a longer loan, there’s more time for a problem to occur. Default rates are high.
These loans are often used to consolidate debts. Clearing others debts can be useful and reduce outgoings. The problem is new debt is often acquired. The overall debt balance often increases. Debt problems deepen.
Several options to address unsecured loan debt exist.
These options aim to clear your debt in time. They aim to reduce your monthly debt payments.
You may have seen adverts for firms including:
As we write, these lenders provide credit with an APR of 28.6% to 99.9%. This high-cost loan credit exposes people to serious debt problems.
If you’re struggling to repay a loan provider, please get in touch for help.
Did you borrow more than you could afford? The lender should check you can afford the payments before lending to you.
What if they failed to make proper checks? You might be able to get the loan’s interest refunded. The amount borrowed will remain repayable.
You must first make your complaint to the lender. You could later take the complaint to the Financial Ombudsman Service.
Debt Camel provides excellent guidance about affordability complaints.
For personal debt advice, please contact us.