Do you want to know a secret? There is no “blacklist”. There is no centralised list of people, who have gotten on the wrong side of their creditors. With that in mind, loans for “blacklisted” people are available. In fact, when handled correctly, repaying loans in time can go a long way in fixing your credit score. However, that doesn’t mean it’s a good idea for a person with bad credit to seek out further debt. Find out how you can use a loan to your advantage and under what circumstances surround loans for blacklisted people.

WHAT DOES IT MEAN TO BE BLACKLISTED?

While there is no literal “blacklist”, this term refers to a creditor denying further credit to a debtor, who has failed to repay past loans (aka has poor credit record). At the end of the day, it always comes back to your credit score. Banks and finance companies’ decision to give you that loan is mainly decided by what the credit bureaus have to say about you.

GETTING CREDIT WHEN BLACKLISTED

Some credit providers are willing to overlook a low credit score, but these are few and far between. If you do find a lender offering loans for blacklisted individuals, it’s always safer to take those offers with a pinch of salt. There are plenty of microlenders, who are happy to offer loans to desperate people… at a staggering interest rate of course. Don’t fall victim to unscrupulous lenders; it can only make an already desperate situation worse.

Things get even trickier if you’re undergoing the debt review process. Once a debt counsellor notifies your creditors that you’re under debt review, you are not allowed to apply for further credit until said debt counsellor has reached an agreement with your creditors about a new repayment schedule.

SHOULD YOU TAKE THE LOAN?

The best response to being in too much debt is to repay your creditors as soon as possible. It looks even better, if you can settle all your accounts at the same time. A consolidation loan allows you to pay off your various creditors in one fell swoop, leaving you to make only one debt repayment each month. This method is easier to keep track of, allowing you to focus your energy on other priorities in your life. Consolidation loans are the best loans for blacklisted people.

However, if your financial situation is such that your cannot even attain a loan for bad credit, consider looking into debt counselling. A debt counsellor can step in to negotiate with your creditors on your behalf and draw up a repayment plan that keeps everyone happy. They may even be able to save you some money in the process.

Of course, the best way to avoid being blacklisted is to know who you owe and repay any outstanding loans completely before taking out further credit. If you do find yourself in a desperate financial situation and fear creditors are closing in, why not get a debt councellor on your side and start your journey back to financial wellness today!