Making your own calculations, becoming your own financial manager will certainly help a lot. If you have too many outstanding loans, perhaps the best thing you could do is to look for a debt consolidation loan. With this type of crediting you can slowly build up your credit history, and if you are lucky to get one on good enough terms, you will be able to save up on the interests you were paying until now. You can calculate the equity left in your home very easily. Let’s say your home’ value on the market is set at £200,000, and that you still owe towards the mortgage £130,000. This means, you have £70,000 worth equity in your home, on the basis of which the lender will decide what percentage of that amount will give you as credit. Sometimes it is possible receive even 100%, however in rare cases especially if your credit report doesn’t look too good.

The drawback of contracting loans when there is a bad credit report present is that most of the times there will be no good terms for it. This means that due to the fact that you sort of present yourself as an untrustworthy borrower, the penalty rates will be higher, the arrangement fees will be higher and also the interest rates will be much higher with these types of loans. The bad terms of a bad credit loan are especially applicable when the loan is unsecured. As a consequence, perhaps the best idea when you have a bad credit report is to seek for a secured loan involving the equity in your home, because with this type of loan only will you get some better terms and conditions.

The following are some tips and hints you should set as guiding principles when contracting a bad credit loan:

• If you need a larger sum of money (education purposes, another property purchase, higher investments), then you should definitely look for a home equity bad credit loan.


• If you need a smaller amount of money (in case of an emergency, bill or tax payments) then you should limit yourself to a personal loan which doesn’t exceed a few thousand dollars. However, you should always calculate the total cost of such a loan, to see whether it is worth it. For example, if you contract a loan of £10,000 on 5 years with an APR of a “low” 9.7%, that will give a monthly repayment of £211, and a total cost of the loan equaling £12,660. Basically in five years you will be paying almost £3,000 only on interests. Imagine how that would feel if you saved that money. So, finding a personal loan on good enough terms is very important.


• If you are interested in purchasing credit card loan while you have bad credit score, be sure to check that there is a monthly reporting to at least 3 major credit bureaus, and that there is a low APR applicable on purchases.