Finding Finance

Where can you find affordable Finance when you have a poor credit history?

There are many options open to you but it is important that you think carefully about taking on any form of credit if you have just come out of an IVA or Bankruptcy. On the high street you will find a mix of retailers willing to give anyone credit but (and yes there is a big but here) at what price? It’s not uncommon for such retailers to advertise rates of 29.9%, however in reality this is a lot higher than it sounds - you could end up paying 3 times the value of the goods so that £300 washing machine has just cost you £900!

It all sounds bleak but do not despair as there are other options that you may not even know exist. Firstly why do you need credit? Think of every reason and weigh up the pros and cons. Do not get credit just because it’s available!

So now after much deliberation AND you are sure that credit is the way to go here are the some options available.

• Try your bank. Yes, it may seem obvious but many people assume their credit rating is so poor they do not try their bank. Be prepared to be turned down but you do not know until you ask! Your bank knows you and your history with them, such as your salary is paid in to their account. If you are offered a loan check the rate as it may not be the best option for you.
• Credit Unions (CU). Most towns have one which you can become a member of to access low cost loans after a 13 week qualifying period. Some may even be able to help without the 13 week rule at a higher rate of interest (normally in the region of 25%) but they would be willing to convert any future lending at a later date to the Credit Union rate of approx 13%.
• Community Development Finance Institutions (CDFI). You can find out if you have a CDFI local to you by looking at the CDFA website. CDFI offer varying products including Personal loans, Business loans, some offer Home improvement loans and a few do savings plans. Not all do personal loans but they do genuinely help people who other wise would use a Doorstep Lender. Rates will vary dependant on the amount you borrow.