Arrears can be scary. Whether it is rent or mortgage payments, payments on a car, or any number of things, no one wants to find themselves unable to pay. Being late with payments can affect your credit rating and make it less likely that you will get credit in the future.
Getting into arrears does not always mean you cannot afford your debts. Many people live payday to payday. When unexpected things happen, your finances can take a knock and leave you unprepared to cover your expenses. This can lead to serious stress and anxiety about going into arrears.
What are your options when it comes to arrears?
Many people often resort to payday loans when they suffer an unexpected expense which has a knock-on effect on their finances. These are short-term, high-interest loans which are usually paid back within a very short period of time.
Whilst these short-term loans can help keep you out of arrears, their short payment terms and high interest means you will pay back a lot more than you took on. This can even mean that next month, although you’ve paid off the credit which initially had you in arrears, you’re now in the same situation with another lender. This can lock you in a cycle of ongoing debt.
Another alternative comes in the form of doorstep lenders. These are lenders who come to your home and lend you money, then collect repayments from your door each week or month. This is a popular loan solution but, unfortunately, many doorstep lenders offer extremely high interest rates and can be fronts for loan sharking. You should always check if doorstep lenders offering you loans that are FCA approved.
A common and popular solution for many is to get a bank or credit card loan. These offer the best return in terms of interest and can be paid back over a much longer period. However, these require a credit check and those with a poorer credit history may not be able to get a favourable interest rate or a loan at all.
A direct loan, also known as a high street loan, from a non-profit lender, is a more reasonable option for many.
Direct loans for arrears
Direct loans are a doorstep and payday loan alternative which offers a number of benefits when compared to these expensive loans. With Street UK’s direct lender loans, you can take out a loan of up to £1,000 and pay it back between 24 and 52 weeks via a repayment plan that suits your personal circumstances.
The longer repayment term and far lower interest on direct loans make them a much better solution for short term financial problems. Street UK offers a representative APR of 180% compared to 299.3% for Provident and 433.5% for Morse’s Club.
An unexpected disruption to your finances leaving you in arrears does not mean that your only options are high-interest loans and a cycle of debt. At Street UK, the financial health of our customers is paramount. We will always carry out an affordability assessment before we decide to lend to you. This means you won’t get stuck in a cycle of debt. We will also provide you with additional information that may be able to support your financial position.
When bad luck strikes leaving you in arrears, a Street UK direct lender loan could be a far more suitable alternative to payday loans and doorstep lenders. Why not fill out our application form below, or visit our about us page to find out more.