“government support is available if you urgently need money and you think the ccj on your credit history will make it harder for you to borrow...”
What are the alternatives?
But a loan isn’t your only option if you’re considering borrowing. Take a look at some of the alternatives available to you:
Credit card
As with loans, there are certain credit cards designed for people who have had difficulties with borrowing in the past and have a poor credit history as a result. This includes the Ocean credit card (representative APR 39.9%).
These cards tend to come with a low credit limit and higher interest rate than the deals you may have seen advertised, but if you make your repayments on time, they can help you to re-build your credit history and show lenders you’re able to borrow responsibly. This could mean you’re able to access better deals in the future.
Guarantor loans
This option can be more risky, but if you’ve got a family member or friend who is willing to help, you might still consider it. A guarantor loan is an unsecured loan designed for people with a blemished credit history, and requires applicants to have a guarantor. Your guarantor will need to have a good credit history, not be linked to you financially and, most importantly, they must be willing to meet your repayments on the loan if you find that you can’t.
These restrictions mean it can be difficult to find someone willing to take on the responsibility of guarantor. You may already have financial links to those closest to you, such as your spouse or partner. If you do find someone, be sure they are fully aware of all the risks, as you don’t want your relationship to suffer if anything goes wrong.
Credit unions
A credit union is a co-operative set up in communities to invest and lend to others. They are typically non-profit making organisations, which means they can be more open to people who have got into financial difficulties in the past.
However, you have to be a member of a credit union in order to borrow from it, so have a look in your area to see if there’s any that you can join. To read more about credit unions, click here.
Other alternatives
If it’s a small loan you’re after, there are other alternatives. Payday loan companies have received a lot of bad press over the last few years, but new FCA regulations have required them to amend their lending practices – including capping the interest rate that they can charge. For instance, you may be able to pay back your loan in instalments rather than all at once. However, you should still expect to pay a high rate of interest on these products.
Government support is available if you urgently need money and you think the CCJ on your credit history will make it harder for you to borrow. If you claim benefits, the government offers a budgeting loan you can apply for, which can help cover the cost of urgent expenses like travel costs, furniture or clothing. You can find out more about it here.
Making the decision to take out a loan is often daunting, but it can be even more so when you have a CCJ issued against you. If you would like to talk about your options, you can contact us through our Twitter or Facebook and we’ll be happy to help.