The last thing anyone would desire to see would bad credit score going worse. When you find it difficult to repay instalments of your current loans and credit card bills, you need to take control of financial matters and take right steps to restore your bad credit situation.

You can consider applying for 12-month loans as a step in this direction. With an affordable short term instalment loan, your instant cash crunch would be resolved and you could build a good credit history with repayment of each instalment.

However, while you apply for bad credit loans it is important to bear certain things in mind. Here is an overview:

1.    There are three important factors that affect a loan decision. These are loan amount, loan term and rate of interest. With bad credit situation, a lender would charge a higher rate of interest to cover the risk associated with your profile.

Coming on to loan term and loan duration, they affect your loan instalment. According to your repayment capacity, you should figure out how much you can repay in each instalment. Depending on your credit situation you should apply for a loan. If you seek a fast loan, you should consider borrowing for 12 months or more.

2.    If you seek 12-month loans without guarantor or collateral, the rate of interest would certainly be higher. Herein it would not be easy to search for a lender who would be interested in extending a loan with a bad score. You can consider using a broker’s service to search for the required loan at the best possible price. The brokers are specialists in searching for cheap loans. They extend their services free of cost and thus act as best guides for people with low credit worth.

3.    Always opt for affordable instalment loan so that you can repay successfully. When loan instalments are affordable it adds to ease of repayment and you are more likely to repay on time and build a good history. It would eventually create a good score and boost your credit worth.

With the bad history, you should always stay vary of unscrupulous credit improvement agencies and understand that no one can delete the bad history from your report. The best you can do is to build good history and bad history would soon fade away.

4.    If you could afford to repay on time, do not opt for greater than 12 month loans for bad credit situation. The greater the duration the greater would be the cost of a loan. And with limited resources, you should save as much as possible. Although the rate of interest would fall with larger duration, the cost of a loan would be higher. You should compare the loan rate, APR % and other charges to know the cost of the loan.

5.    Last but not the least; apply for a fixed rate of interest when you seek loans for 12 months or less. The fixed rate of interest entails fixed instalments and thereby helps you plan repayment well in advance. It adds to ease of repayment.