Is a Personal Loan Possible with a CCJ? How is Borrowing Money Affected by County Court Judgements?
Defaulting on an unsecured loan or credit card often results in a County Court Judgement or CCJ. This can make borrowing money, such as a personal loan, very difficult. A CCJ stays on a personal credit report for 6 years. However, it remains possible for people to get payday cash with bad credit.
How a CCJ or County Court Judgement Affects Access to Unsecured Personal Loans
Having a CCJ will make getting an unsecured personal loan difficult. The loan default, denoted by the CCJ, will mean that someone seeking to borrow money will be deemed too high a risk by lenders. Most high street banks will not approve an unsecured personal loan.
Borrowing money is more difficult for those with a CCJ, but not an insurmountable obstacle. There are specialist lenders for bad credit unsecured loans, but it may result in a high APR of about 50-60%. A high APR personal loan will add to personal debt problems and will only serve to exacerbate any financial difficulties.
Bad Credit Payday Personal Loans
Payday personal loans are a source of short term borrowing aimed at helping people reach their next pay cheque. They allow someone to borrow up to about £1,000 and receive the money very quickly, usually on the same day. An applicant will need to prove that they are 18 years old, have a bank account and are in full time employment.
No credit checks are performed so they appeal to people with: bad credit, adverse credit, County Court Judgements or CCJ’s, loan defaults and bankrupts. A payday loan helps to fill a short term hole in personal finances. The rate of interest charged is in excess of 1000% and tends to reflects the risk of loan default posed to the lender.
Chris Tapp of the Donal MacIntyre programme stated that, “We would only ever want to see people using no credit payday loans if they have a desperate, one off short-term need and there is absolutely no other option.”
Secured Loans for People with County Court Judgements and CCJ’s
Homeowners with bad credit because of a County Court Judgement or CCJ may prefer to take out a secured loan. A secured loan gives a lender collateral. In the event of loan default, a creditor could repossess a property to recover their money.
Whilst a CCJ will mean a higher rate of APR, a secured loan will allow someone seeking to borrow money to get a personal loan at a better rate than an unsecured loan. It will also mean that someone can borrow a larger sum of money, but this depends upon how much home equity is available.
Debt Solutions Vs Personal Loans
Taking out a further unsecured loan when struggling with financial difficulties and high levels of personal debt isn’t always a good idea. A County Court Judgement or CCJ will mean a high APR, which may mean that monthly repayments on a personal loan aren’t sustainable.