You might not realise that you have a bad credit rating until the time comes to apply for a loan and you are turned down. This can come as a shock but do not worry, just because you have been turned down once doesn’t necessarily mean that you cannot borrow. It does mean that your options are more limited, but if you need a loan with bad credit it is still possible, and we can help to match you up with a lender.
We Can Match You with Lenders Offering Competitive Rates
We do not provide loans, but we are experts in the field of finance in the UK and work with numerous lenders offering competitive rates. This is important because if your credit rating is bad you are not going to be able to take advantage of the rates and deals offered to those with a good credit rating. You can, however, obtain the most competitive rates for your circumstances.
Numerous Loan Options Out There
Just as the circumstances of all people differ, so do the loans offered. There is no one type of loan aimed at people with poor credit. Even with a poor credit rating, you may still apply for many of the loans people with a good credit apply for.
You could consider the small term loan, the payday loan, a personal loan or a guarantor loan.
What Are the Chances of Approval if I Need a Loan with Bad Credit?
There is never any guarantee for getting approval for a loan, regardless of your credit rating stance.
Your credit rating is determined by three different credit agencies in the UK all of whom give you a score based on specified factors. These factors include, but are not limited to, your past borrowing history, CCJs, late or missed repayments and how much credit you have outstanding.
All UK lenders have to look into your credit rating by law. This is so they can reach a decision in regard to whether they think you could afford to repay a loan. However, what one lender determines to be a very bad score and turns you down, another lender might think you have a poor credit score, but you should be given a chance.
Here at Bonsai Finance, we work to match borrowers with the right lender who take into account your ability to repay the loan more than the state of your credit rating.
They may make a soft check on your credit file, which means they do not look too deep into it. A full check, on the other hand means lenders scrutinise every aspect of your credit rating.
Criteria for Applying For a Loan
Whatever your credit score there are some criteria that all borrowers need to meet before being classed as being eligible. This includes:
- Your age – You must be 18 years or older;
- A bank account – You must have a bank account in your name in the UK;
- Debit card – You should have a valid debit card attached to your bank account;
- Direct Debit – to repay the loan a direct debit has to be set up for the repayments.
If you meet this criterion, you are in a position to apply for a small loan, payday loan, personal loan or a guarantor loan. The next choice is which is the most suitable for you?
Borrow a Small Amount Repay on Your Next Payday
The payday loan or short term loan is a loan that has become popular with those with bad credit as it can help to rebuild a credit score by repaying on time. This type of loan is suitable if you only want to borrow a small sum of money, say up to £500 and you know you will be able to pay it back over one to three months. This comes in handy if a financial emergency arrives on your doorstep.
Borrow a Larger Sum Repay Over Longer
If you want to borrow a larger sum of money, you might want to consider the personal loan or guarantor loan. With both of these loans, you might be able to borrow up to £5,000 and spread the cost of repayments for up to 36 months.
When considering repaying the loan, always choose the lowest affordable term. Bear in mind that interest is added onto the loan per year, this is the annual percentage rate (APR). The shorter the term (years) the less interest you will pay and the less amount overall you will pay back. Always make sure the loan repayments are affordable each month.
Get Someone to Stand as Guarantor
If you want to improve your chances of being approved for a loan, you might want to consider a guarantor loan.
If someone close to you is willing to stand as a guarantor this type of loan might be the most apt. Bear in mind, if you cannot repay the loan whoever stands as your guarantor, will have to take the repayments on or pay the loan in full. So always ensure you can repay any loan.
We cannot promise that you will be approved for a loan if you have a bad credit rating, but we can make the process of searching for and applying for loans a great deal easier.
Bonsai Finance works with lenders who may be more willing than others to offer loans designed for people with poor credit scores. While you will not be offered the best rates of interest, you will at least be offered the best rates based on your circumstances.
If you need a loan with bad credit and want an affordable loan, we can help you find it.