Even if you’re used to getting rejected because of your bad credit, there’s no need to panic. There are plenty of lenders offering solutions for people such as yourself. You just need to make sure you know all of your options and understand what each offers. The following are the main types of bad credit loans you should be considering when a traditional loan is simply not an option.
1.) Guarantor Loans
Guarantor loans are unsecured loans that can help you borrow as little as £100 [£1 = US$1.33] and as much as £15,000 even with a poor credit history. They are among the most popular types of loans because they’re cheaper and more flexible than other forms of borrowing with a bad credit.
As a matter of fact, the credit history and score of the guarantor will be more important, making them one of the best for people with poor credit or with blemishes on their report. They’re also ideal for people with no credit history. Furthermore, guarantor loans can also help borrowers improve their credit rating after successfully repaying them.
2.) Personal Loans
The great thing about personal loans is that you can borrow large sums over one to five years, all this without providing any collateral or security. Less than perfect credit scores are accepted by many lenders and you don’t need a guarantor either. Opal Loans, for example, offers unsecured loans to people with bad credit provided they have a salary of at least £800 per month.
3.) Secured Loans
Secured loans allow borrowers to borrow even larger sums than regular unsecured loans, and the sum can be repaid up to 25 years in some cases. Poor credit plans are available, which makes them a viable option for those with a not-so-perfect credit score. However, you do need to own a home and have a mortgage in order to be eligible for secured loans because they are secured on the value of the property.
4. Logbook Loans
Logbook loans are those attached to a vehicle. Unfortunately, the loan interest is often very high on these types of loans. Nonetheless, if you really cannot find a better solution, they are still a valuable option for borrowing a smaller amount of money.
5.) Payday Loans
One-month payday loans are the quickest way to get up to £1000. They are a real option for those with bad credit but only trusted lenders should be chosen. The money is usually transferred within 24 hours. However, if you’re thinking of applying for this loan, you need to make sure you can repay it in due time. It’s also advised to use this type of loan for very short periods of time.
6.) Instalment Loans
With instalment loans, you can often borrow up to £2000 over two years. They are a better alternative to payday loans because they allow you to repay them over a longer period of time but fast pay out is also possible. Furthermore, you can also avoid paying the extra fees and interest attached to payday loans. However, it is still one of those loans to use in exceptional circumstances because it’s one of the most expensive ways to borrow.
While credit score information is important for lenders, they are more interested in whether you can repay the loan or not. This is why, even with bad credit, you still stand a very good chance of getting approved for some of the options above. Just make sure to repay your loan by the due date if you don’t want to end up with even bigger financial problems.
Emily Roberts is a young writer who is passionate about literature and blog writing.