Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a credit broker and not a direct lender.

Should You Approach a Broker for a Bad-Credit Loan, or Go to Lenders Directly?

Should You Approach a Broker for a Bad-Credit Loan, or Go to Lenders Directly?

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Many of us can find ourselves in a situation in life in which taking out a loan might make a certain amount of sense. You may be thinking of seeking out a loan for the purposes of making longed-for home improvements or even your dream holiday or wedding possible.

How much would you like to borrow?
£ 500

Or you might have found yourself in a financial squeeze in general, but know you will be able to repay a loan with funds you will imminently have coming in – if only you could get a lender to approve you for such an arrangement.

Of course, here at CashCompare, we would always strongly emphasize the importance of you only seeking out a loan if you know you will definitely be able to repay it.

Warning: Borrowing beyond your means can lead to serious financial problems. For free independent advice on managing debts, visit MoneyHelper (https://moneyhelper.org.uk).

So, in the event of this being the case for you, what would be the best course of action – going through lenders one by one, or using the services of a credit broker?

Having bad credit can present issues when you go to lenders directly.

Having bad credit can present issues when you go to lenders directly

You might be reading this with a particular possible source of a short term loan already in mind. However, you should also ask yourself what that lender’s reputation is when it comes to helping people with bad credit, if this describes your situation. Indeed, even if the lender you’re contemplating claims to be dedicated to helping bad-credit applicants such as yourself, this might not be backed up by their actual track record.

This is before we get to the issue of what happens if you go to one lender after another, and get repeatedly rejected.

When any given person applies for a loan from a lender, they can expect to be subject to a “hard” credit check. This refers to the process of a company undertaking a complete search of a particular applicant’s credit record. It is an essential part of a lender’s process for checking and understanding the applicant’s financial behavior, which they will use to make a decision on the loan application.

A downside of a “hard” credit check, however, is that it effectively leaves a “mark” on the checked person’s credit report. A succession of “hard” credit checks in a short space of time, then, could have the effect of driving down the given individual’s credit score temporarily, thereby potentially damaging their chances of getting credit in the future (at least in the short term, anyway).

And naturally, if you already have iffy credit, that’s not a situation you will ideally want when you are eager to get approval for a loan.

As a credit broker, CashCompare does not lend money directly but helps you find potential loan offers from a panel of FCA-regulated lenders, ensuring fair practices and consumer protection.

A broker can help you sift through the wider market, with no obligation.

A broker can help you sift through the wider market, with no obligation

Credit brokers, as you might have gathered from reading this article, are different to lenders; they are not lenders in their own right, instead offering services to help people find credit.

CashCompare is an example of a credit broker. Our services work in a very simple way: someone who is on the lookout for a short-term loan can fill in and submit our short form online, inputting details such as the amount of money they would like to borrow, and the number of months over which they wish to repay the funds.

Once you have submitted that information, our system will work through our extensive panel of lenders, so that we can present you with the ideal loan for your requirements. This can be followed by you going to the lender’s page to see the full offer – and bear in mind that at this stage, no “hard” credit check will have yet been carried out. Nor will you be under any obligation to accept the offer.

It's crucial to thoroughly review and understand all terms and conditions of any loan offer and consider your financial situation before proceeding. If you're unsure, seek independent financial advice.

As for if you do like the loan offer… well, you will be free to say yes to it, and to complete the formal approval processes with the lender themselves. Before long, you will be able to expect the loan money to be transferred into your bank account.

With many of the lenders that we work with having an excellent track record of helping people who have poor credit, using the service of a credit broker like ours could help you avoid having to go manually from one lender to the next, in search of bad credit loans in the UK. It is a much more streamlined, quick, and elegant process.

Ultimately, your final decision on whether you apply for a loan through a broker or approach lenders directly, very much lies with you. But don’t forget that when you use our no-obligation loan request form here at CashCompare, you could be receiving loan offers within minutes – so, using our services is a possibility that could be well worth considering.

If you have any concerns or complaints about our services, please contact us directly, or for independent support, you may approach the Financial Ombudsman Service.

We partner with a range of FCA-regulated lenders, ensuring that all loan offers adhere to strict standards of responsible lending and transparency.

"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.

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