Despite the perils of fast credit deals, a lot of borrowers prefer to borrow online loans from private lenders. Unlike main street lenders, online loans are more flexible and accessible for borrowers with less than perfect score.
Since 2008 the FinTech industry in the UK has flourished over 50% each year. This figure is twice high the growth that Silicon Valley received in the same period. The UK government now considers FinTech as a high priority market as it brings £ 9 billion to the economy every year and creates more than 60,000 jobs.
With thriving FinTech players, several unscrupulous lenders are also active in the UK landscape. Despite the strict vigil of Financial Conduct Authority (FCA), a lot of loan sharks try to contact desperate borrowers and offer cheap bad credit loans. Many of these claim that they are authorized by the FCA. Being a prudent borrower, you must thus know how to stay away from such dodgy loan providers.
How to identify loan sharks?
Loan sharks could be individuals or companies. They could be anywhere around you in the public places, restaurants, pubs, grocery stores, or anywhere. They target human psychology and offer small loans at nominal rates. The sole aim is to deceive the borrower of hefty sum in name of interest and other hidden charges. You would be highly mistaken if assume that these loan sharks are active as private players only. There are many who claim that they are authorized by the FCA. Thus it is important to know how to identify a genuine loan provider from a fake one.
1. A genuine loan provider would never contact you for offering the loan. FCA has barred the loan providers to share the deals directly with the lenders. The first point of contact should be initiated by you. Thus, beware of the modest looking men who offer you loans for your financial crisis.
2. An authorized loan broker always has a license number and other details on their website. They will share everything in papers following a legal route; while a loan shark would use sweet talk in lieu of documentation. Beware of such sham parties.
3. Always read the terms and conditions carefully. You should always enquire about the late payment and / or prepayment charges or any other hidden charges. For such additional fees can elevate the burden of loan to unthinkable levels.
One of the safest ways to locate a regulated lender is to contact online an FCA regulated loan broker and request a loan. Being regulated loan brokers they search for loans according to your repayment capacity. You can access multiple loans from experienced lenders, right at your door. It is hassle free and safe to search loans from regulated brokers. You can compare and choose the one that best matches with your requirements.
While choosing a bad credit loan, keep certain things in mind. When you decide to borrow despite poor credit rating, it raises a red flag in your credit report. It would hurt your credit score further. Thus it is important to evaluate if you could repay the loan or not. Nonpayment of bad credit loans could be detrimental to your credit health. It can attract a late payment charge.
You must try to borrow small short term loans for bad credit. For, they are easy to repay and manage. Make sure you never borrow more than what is required.
Keeping this simple checklist, I hope you could borrow safe for better credit health.