The customer’s credit history is the first to be checked by both banks and non-bank lenders. What if you can’t afford the extra money but have a bad credit history because of the debt ? Solution – credit for debtors. What is the chances of debtors getting a loan and how to find a suitable loan offer, let’s talk in this article!
How does responsible borrowing affect the credit industry?
Borrow responsibly when evaluating your chances of repayment – who hasn’t heard such a phrase? A wise approach to credit is needed by every potential borrower, but responsible borrowing affects not only the experience of each individual borrower but also the credit industry as a whole.
Modern people are accustomed to making extra money available on the Internet – it is enough to fill out a loan application on the lender’s website and in less than half an hour the loan has already been transferred to a bank account. This is handy in many situations, but who provides that opportunity? Lender’s confidence in the borrower.
The loan is granted without pledge, surety and extensive documentation if the credit risk is low and the creditor is confident that the loan will be repaid on time. Negative credit history and active debt increase the risk of credit several times, making it much more difficult for borrowers to obtain credit than a loan with a positive credit history.
That is why a credit history check is the first thing a credit specialist does when getting a loan application. If your financial history is far from perfect, you may need a loan with a bad credit history.
Are you sure you have a bad credit history ?
How to Tell if I’m on the Black List – This is a question that many people have asked who have had problems repaying their loans. Everyone knows whether or not they have overdue credit, but not everyone knows that having a bad credit history is not a life long stamp. Negative credit history is deleted after:
- for a period of five years from the date of payment of the debt if the loan and debt is repaid in full;
- ten years after the first day of delay for payment of the loan, if the debt is not repaid.
It is also important to note that a person’s entry into the debt history database does not take place immediately after the credit delay, but after 60 days. This allows the borrower to avoid future difficulties by repaying the loan within 60 days, agreeing with the lender on restructuring the repayment schedule, or applying for a loan refinancing with another lender.
Bad credit history ? Check it out here!
There are various databases in Latvia where you can check your credit history. We recommend two:
- Credit Register of the Bank of Latvia. Authentication in the database can be done with an electronic identity card – eID card. The request for information may also be submitted in person and sent by post;
- The portal ” manakreditvesture.lv ” maintained by “Credit Information Bureau” (KIB). Individuals can enter the portal using their bank details and enter the required additional information.
The credit history database contains information about an individual’s active debt and overdue payments. Every individual is entitled to receive information on their credit history twice a year free of charge. In addition to the credit history information, the applicant also receives information about which companies are interested in his or her credit history status.
And now is the time to find the answer to the most important question – what kind of credit is offered to debtors, and in what situations may borrowing be needed? Keep reading and find out!
Is credit for debtors and credit consolidation the same?
Loans to debtors are divided into two parts – loans for everyday use and loans to cover existing debt. We draw your attention to the fact that borrowing can only be borrowed when it comes to credit consolidation – a specialized service, a long-term loan whose sole purpose is to cancel active debts. All other loans – quick and consumer loans – will not help you pay off your creditors for two reasons:
- their maturity may be too low to allow the borrower to repay loans in full and in difficult financial circumstances;
- lenders may refuse credit to the debtor or offer a lower amount, which in any case will not be sufficient to service the debt.
As you can see, credit consolidation and loans to debtors do not always mean the same thing. Individuals with active debts may also need additional money, whether or not they have applied for a loan combination.
TOP situations where credit debtors are justified
If your borrowing is for everyday expenses, the need for a loan should be double-cautious. Debtors are advised to borrow only if another credit is the only chance to get money and if the situation requires an immediate solution. The credit can be used for:
- payment of urgent bills;
- medical expenses;
- urgent daily expenses, such as buying tickets if you have to go to a sick relative urgently.
Unlike regular consumer loans and credit cards, loans to debtors are not suitable for expenses such as repairs or the purchase of household appliances. Nor can they serve as a financial cushion during travel. Getting rid of the debt burden is a top priority for any debtor, so postpone irrelevant spending and borrow only when you really need to.
Instruction for debtors: how to find a lender C. Henry MOney ?
The credit market in Latvia is saturated with offers, but a positive credit history is a must for almost all lenders. Bad credit history and active debt loans are only available to some lenders, so finding a creditor on your own is time consuming and inefficient. Use our platform to find a lender that also works with debtors.
We, the team of C. Henry MOney, have already selected all non-bank lenders offering bad credit consumer loans. Note that loans to debtors are usually available on much stricter terms than loans with a positive credit history. Unfortunately, the debtor has to put up with the creditor’s terms because the chances of getting a loan elsewhere are not very high.
Upon receiving a loan application from the debtor, the lender may offer:
- loan against collateral. Although traditional online loans are unsecured and collateralised, loans to debtors may only be available against collateral because of the higher risk involved;
- a loan with a lower credit limit and / or a shorter repayment term. Past and present debts have a significant impact on how much and for how long a borrower can access;
- a higher interest rate loan. Unless the online credit agreement lays down a fixed interest rate for all loans, it is likely that the overpayment on credit debtors will be higher than on a regular loan.
If debt is your only chance to get the money you need, don’t hurry to get a loan with the first lender ready to work with you. Look at all the offers and contact each lender, because only with full information you will not be able to get into even bigger stakes.
Although a bad credit history complicates life, credit is not an impossible mission for debtors. We, the credit comparison portal C. Henry MOney, are ready to help you find a lender even in a difficult situation. Compare different credit types on C. Henry MOney’s website and don’t waste time!