Bad Credit Loans in the British Marketplace. An Introduction to Bad Credit Loans in the Post Recession Economy

Financial markets are experiencing major reforms in the current post-recession climate; while in the USA the Obama administration battles for fresh regulations to the financial system, in Britain significant overhauls are also on the cards under the new coalition government. A few loans that were broadly available before the country fell into its worst recession since World War II have now been removed from the market; consumers that were welcome at the high street bank are now turned away. However now, a new variety of independent merchants are promoting financial services online. These include a significant variety of credit cards, specialist loans and investment trade platforms. These firms offer an alternative to customers who have become acquainted with the new, tougher banking method. bad credit loans are but one of the countless specialist loans which are available from lending companies that do business via the internet. As their name suggests, they are designed for consumers who already carry a bad credit record. But what exactly does a bad credit loan offer people who are not accepted by traditional banks – and how safe are they really?

Criticism is mixed. On one side of the fence are those who argue that credit which is specially created for individuals who are already deemed ‘unsuitable’ by high street banks shouldn’t be on offer at all. A loan for bad credit could, it is reasoned, give a consumer with notable risk of spiralling into deeper debt. As such it could be a dangerous pitfall for an economy which is still weak. After all, weren’t easy-access loans a huge part of the UK’s fall into fiscal hardship? On the other side of the fence are those who argue that without loans for bad credit, a larger number of people would land in serious hardship. Additionally it is reasoned that not all hopeful borrowers are heading into a commonly-named debt spiral. A low credit score can be achieved just by being a new entrant to the UK or having made one mistake in the past.

Whichever argument is correct there are means of benefiting from bad credit loans. Bad credit loans are much lower in risk than, for example, payday loans. They are only available with an APR rate which is decided from a borrower’s individual credit rating. In other words, the rate of interest reflects a personal circumstance. A crucial feature of bad credit loans, which numerous critics view as beneficial, are features such as credit rebuilding. This is a service which gives the borrower the chance to rebuild their future credit status provided they are sensible with loan instalments on the current loan. Taking into account the amount of specialist credit products available nowadays, one thing is clear: the UK loan market is as booming as it has ever been and is still attracting customers who are interested in seeking an alternative to mainstream banks.

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