If you’ve been refused a loan or turned down for a credit card, and you need money, you might be wondering if there are any other options open to you. If you’re looking to borrow money, you may not have exhausted every opportunity yet. Here are 4 suggestions from Dave Beard at financial hub Lendingexpert.co.uk that may prove useful.
- Borrowing from people you know
If you’ve been refused credit and you want to borrow money, have you thought about asking a close friend or a family member for a loan? If you know somebody who would be able to help you out, approach them and ask them if they would be willing to lend you money. You can set up terms to pay the money back, for example, you’ll give them £200 a month until you’ve paid off your £2,000 loan, or you can come up with an arrangement to pay the full sum back when you can afford to. Borrowing from friends and family often works well because you avoid paying high interest fees, and you can be more flexible when repaying the loan.
- Using an authorised overdraft
If you need money, and you have a bank account, it may be possible to extend your overdraft or add an overdraft facility if you don’t already have one. To do this, you’ll need to visit the local branch of your bank or get in contact via telephone. Many banks have a series of contact numbers, and there may be an option specifically designed for those with queries about overdrafts. If your bank does approve your overdraft request, this will enable you to effectively borrow money from the bank, but you must not go over the limit. Most banks will charge a fee if you exceed the agreed limit. You might also have to pay a monthly fee for your overdraft. Check all the charges before you agree to go ahead.
- Contacting a credit union
Credit unions are nonprofit organisations, which may be able to help you if you need money and you can’t get a loan or a credit card. Credit unions offer loans with low interest rates, they don’t usually charge for early repayment, and they also provide financial advice and tips to help you save. Before you can borrow money from a credit union, you’ll need to become a member. You can find a local credit union by visiting the Association of British Credit Unions website.
- Improving your chances of borrowing in the future
If you have been turned down for a loan or a credit card, it’s useful to find out why, as this will help you increase your chances of being able to borrow money in the future. Often, your credit score has an instrumental role to play. If you’ve got a low credit score, this indicates high risk for a lender. Your credit rating may be poor if you have missed payments in the past, you have a lot of outstanding debt, or you rarely use your bank account. You can improve your score by paying off debts, keeping up with rent and mortgage payments, paying bills on time, and using your account frequently. If you’ve been rejected by a lender, don’t apply for more credit. If you have an application turned down, this will have a negative impact on your credit score. It’s best to wait until your rating is higher.
If you’ve been refused credit, there may still be ways to borrow money. Seek expert advice, and explore these options: https://www.lendingexpert.co.uk/how-to-get-a-loan-after-being-refused-credit/