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CCJ Loans: Exploring the different Options
Have a CCJ? If you have, then you may have rejected the idea of taking out a loan with the fear of being snubbed by lenders. While it’s it true that many lenders will consider a CCJ as an automatic red flag, there is still a good amount of CCJ loans that you can consider in the UK today. There are plenty of online lenders who will give you the funding that you need even if you have a CCJ and this article will show all the options that you can look into.
Types of CCJ loans UK
There are enough lenders in the UK today who will lend you the money that you need regardless of whether you have a satisfied or unsatisfied CCJ on your credit profile. To offset the risk associated with your CCJ status though, lenders will normally put high-interest rates on your loan deal. You can expect APRs hovering around 40% and sometimes lenders may ask you to put up some form of security for your loan deal be it a guarantor or a logbook. Payday loans and doorstep loans are the exceptions to this rule although many lenders will only offer £500 to new customers.
With that being said, here are the CCJ loans that you can consider when you need reliable funding in the UK today.
1.) Guarantor Loans
Guarantor loans can give you access to borrowing amounts anywhere from £50 – £10, 000 with application processes that can cater those with CCJs. If you can find someone close to you, like a relative, friend or co-worker, who is willing to back your loan application then a guarantor loan is a CCJ loan that you can consider. The guarantor will have the responsibility to take over the loan’s repayments if you are unable to and must meet certain eligibility criteria such as possessing a strong credit score, a steady source of income and must be financially independent of you.
2.) Doorstep loans
Doorstep loans can provide as much as £1,000 of convenient funding right at your doorsteps regardless if you have bad credit, poor to non-existent credit history, or have a CCJ. The loan is arranged right in the very comfort of your home by a friendly local agent representing your lender. The same agent will then return to your home to collect the repayments every week or on a fortnightly basis. The CCJ loans are extremely popular options all over the UK because of the great convenience and accessibility that they provide.
3.) Logbook loans
If you have a vehicle that is free of finance and is not more than 10 years old, then a logbook loan is a viable option. The CCJ loans work by securing the repayments against your vehicle. The lender will have temporary possession of your logbook throughout the duration of the loan. This means you can keep using your vehicle as long as you make the proper repayments. You can take out the loan online and on the high street with borrowing amounts that often equal to 50% or as much as 70% of your vehicle’s trade-in value subject to affordability check.
4.) Payday Loans
Payday loans, as it names suggests, are designed to be repaid on a short period time – typically in your next payday. The loans can offer small borrowing amounts anywhere from £100 to £1000 with seamless application processes, lenient eligibility requirements, and instant payouts (usually on the same day you made your application). The type of CCJ loan typically comes with high-interest rates so be sure to compare the different offers from a constellation of lenders online before you decide to apply for one.
The other Alternatives
Aside from the four types of CCJ loans mentioned above, there are also other alternatives that you can look into to secure the funding that you need. If you have a CCJ, you can also consider:
1.) Credit cards
Just like loans, there are credit cards designed for people who have had credit problems in the past including those that have bad credit and CCJ’s. The cards typically have lower credit limits and higher interest rates than other normal credit cards, but if you make the proper repayments, it can be a great opportunity to build your credit history back to favorable levels and prove to lenders that you can borrow money responsibly. This would then help you obtain better deals in the future.
2.) Credit unions
Credit unions are built in communities so they can invest and lend money to the people in the area. They are normally non-profit organisations which means they can be more accepting of people who have financial and credit difficulties in the past. You need to be a member of the union to access their financing services, however.
What to avoid with your CCJ loans
Never apply for loans with CCJ that you are sure that you cannot afford. Most CCJ loans will require some form of security which means if you can’t keep up with your repayments then the lender has the legal right to take possession of your home or vehicle and sell it to recoup their loses. In the case of guarantor loans, your guarantor will have to pick up the bill and this can strain the relationship you have with that person.
So what are the basic requirements of CCJ loans UK? Normally, you will just have to be at least 18 years of age, a legal resident of the UK and have your own bank account to qualify. You will also have to prove to your lender that you have the financial means to afford the loan and its repayments.
How to choose the right CCJ loan for you
Before you apply for a CCJ loan, be sure that you already know firsthand whether you meet the lender’s borrowing requirements. This is especially true if you have a CCJ as not all lenders will cater borrowers with CCJs. You can also rely on brokers and comparison sites to help you land the lender that is suitable to your needs and present circumstances.