> CCJ Loan - UK Guide
In a nutshell
A loan available to people who have CCJs (County Court Judgements) against them.
Best Loan for
People with CCJs on their credit history or other related financial problems.
The amount you will be allowed to borrow will vary from lender to lender - each will have their own minimum and maximum borrowing limits. It may also depend on what you want the loan for and which type of loan you can/will take out (i.e. whether you take out a secured or unsecured loan, for example). It is possible to find a lender that will let you borrow as little as a few hundred pounds and some will let you borrow £100,000+. You allowed borrowing will probably be based on an analysis of your income and your spending every month to assess how much you can afford in repayments so the lender can work out how much to lend you.
CCJ loan periods will be dictated partly by the loan product you choose and partly by your lender's set standards. You'll generally find that loan periods will start at twelve months and can rise up to 25+ years.
Whenever you try to borrow money, you'll most likely be credit checked by your lender. This helps them build up a picture of how you have managed financially in the past. Having a CCJ on your credit rating - no matter how good your excuse - is like a big neon sign telling the lender that you're a risk. So, you would normally find it hard to get a standard loan in this case. A CCJ loan, however, takes away all this stress and helps you raise the finance you need. It'll also probably work out with cheaper rates than you would get if you did find a lender to agree to give you a mainstream loan. They would charge you higher interest because of your record - CCJ loans specialists understand your situation and can therefore keep their rates as favourable as possible for you.
What to look out for
You can't hide from the fact that you will have to pay more for a CCJ loan than for a standard loan charged at standard rates (although this should still work out as a better deal than if you were accepted by a mainstream lender). So, look around to find the best deal that you can. You may also be charged fees to have your loan arranged - which you may have to pay to get the loan if your financial situation is really bad. You also need to be aware that CCJ loans providers don't always offer the rate you might see advertised. They will look at your individual situation and - the worse you look financially - the more you'll have to pay. It's hard to get the best deal sometimes when you have financial problems - for example, you may find yourself tied into a deal that will not allow you to repay your loan early without having to pay a hefty fee, for example. If you can, try and find a lender with some flexibility here - you might find payment holidays a useful addition to have as well. One problem that many consumers encounter with CCJ loans is that they take on more than they can afford to repay. If you do find that you can't make your regular repayments then you run the risk of legal proceedings which - with a secured loan - could see you lose your home. This obviously can't happen with an unsecured loan but your lenders will still be able to take action to recover their money. At the very least you could find that your credit rating plummets even more if you have problems with arrears or non-payment. Even if you know that you can afford your repayments, you might want to look at payment protection insurance in case something unexpected occurs such as losing your job or having an accident etc.
As an alternative you could try taking advice from a mainstream lender to see where you stand - but, a CCJ loan may be your best and only option.