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How Personal Loans Can Help You To Defeat Bad Credit?
  • admin
  • September 8, 2022

How Personal Loans Can Help You To Defeat Bad Credit?

Traditionally, financial crises during a poor credit situation can be a big problem in Ireland. However, of late, economic prospects and advancements need not be halted due to credit issues.

People can still work around their monetary desires to fulfil their critical objectives. They can patch funding gaps with the availability of personal loans in Ireland for bad credit.

Applying for these loans is straightforward. But individuals must compare interest rates and offerings before obtaining a loan, especially with bad credit.

Check and modify poor credit standing to ensure future eligibility for loans. Credit scores play a vital role in the disbursal of a loan.

Bad credit stems from a range of reasons, including missed payments, late payments and no prior credit history. Debt tracking is conducted on every transaction, based on which the score is assigned.

This guide explains what personal loans in Ireland are and how to avoid bad credit.

About Personal Loans

For personal loans, individuals can approach local lenders based in Ireland. But it would be best to look for options across both UK and Ireland for more viability.

A personal loan is an adaptable financial tool that provides an immediate financial response to unforeseen circumstances or situations.

Since only a signature is required to obtain the funds after an approved loan, personal loans are also called "signature loans."

Because personal loans are unsecured—there is no need to produce collateral to secure them—they are more accessible than other types of loans. In addition to weak credit, people might use personal loans for a variety of other reasons.

Personal loans don't have a set use, unlike mortgages and auto loans, which help pay for homes and vehicles, respectively. People can utilise them for the following:

  • Consolidate debt to organise finances better
  • Take care of medical costs
  • Create or strengthen credit history
  • Finance house renovation or repair projects
  • Finance a marriage
  • Pay for vehicle maintenance
  • Control or balance the household budget
  • Pay moving and packing expenses
  • Regulate a company's operating expenses
  • Finance a vacation

Personal loans can assist in bridging the gap between the realisation of aspirations and the stability of the financial situation. With a personal loan, the expense of a project over a specified term may easily be divided into manageable monthly instalments.

Especially over time, affordable instalments allow more breathing space and greater control over expenditures. But before choosing a personal loan, it is advisable to make sure that the budget includes the capacity for repayments.

Borrowing in Ireland

Here are some reasons to benefit from obtaining personal loans in Ireland.

  • Attractive interest rates compared to other financing products
  • Easy schedule of payments over fixed monthly instalments
  • Enjoy greater borrowing limits
  • Improved financial access without collateral security
  • Utilize a single loan to address a wide range of issues

Considerations to make before obtaining a personal loan

  • Although the borrowing limitations on personal loans are typically more considerable, it is advisable only to borrow a repayable amount of money
  • Timely repayments are an essential factor for a loan to be successful. It is true, especially for individuals taking out a personal loan to improve their credit. Missed payments may severely impact the credit score.
  • Because personal loans are unsecured, interest rates may be greater than for secured loans. Lenders frequently do this to reduce the risk of loss in case of a possible default.
  • The person's specific financial and personal circumstances, including income and credit score, determine the rate. Therefore, it is best to maintain a higher credit score.
  • Predatory loans from unscrupulous lenders can prove extremely costly. For a risk-free and straightforward borrowing experience, choose an FCA-approved broker.
  • Defaults recorded against a person’s credit report can leave indelible marks. It affects the future likelihood of obtaining loans, thus disrupting life milestones.

Bad credit affects personal loan applications

Lenders evaluate a loan application comprehensively before making decisions regarding disbursals, interest rates and approvals.

A low credit score indicates financial and repayment troubles against debts and credit cards.  Lenders may either reject the application or just grant a small loan against a high APR.

It is best to improve credit scores before applying for a loan.


Average APRs against each credit band:

How can individuals improve their credit scores?

The chances of getting approved for loans at the best rates increase as credit ratings rise. Here are some recommendations for improving credit ratings.

Proof of Residence

Whether the person is living in shared accommodation or at home with parents, they must register to vote on the electoral roll with the current address.

On-time Payments

Well-managed accounts generally improve credit scores. Bill and account payments must occur on time each month and in full. This way, the lenders are convinced about the reliability of the borrower.

Building the credit history

It can be challenging for lenders to determine borrowers’ trustworthiness when they have little to no credit history. It is a common issue with the younger generation and those new to the country.

Checking for mistakes and errors in the credit report

Minor errors, including misspelt addresses, could lead to the denial of loans. Individuals need to verify the accuracy of the information on their credit reports periodically.

Monitoring reports for fraudulent activity

Fraudsters can obtain credit in another person’s name when they access personal information. Individuals must take adequate steps if they have fallen prey to identity theft.

Limiting credit applications

Frequent credit applications in a short period of time may give lenders the impression that the person is overly dependent on credit. They are considered a high-risk activity, and every application results in a hard search.

A reasonable rule of thumb is to submit no more than one credit application every three months. Individuals must keep in mind that lenders' requirements can change.


Getting personal loans in Ireland for bad credit is easy if individuals keep all factors in check. In addition, they must perform periodic reviews to ensure that their scores are optimal, even if the loan application is for bad credit.

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