Having a bad credit rating is no fun; this becomes more relevant if there is a time when you want to borrow cash fast. So if your credit score is poor and you need to get your hands on money quickly what are your options? Instant loans for bad credit could be the answer.
What Are Instant Loans?
Instant loans are loans that can be applied for within a few minutes and if approved you get money in the bank within hours or days. You apply for the loan online and the lender considers your current circumstances, such as your income and outgoings.
The entire loan process is undertaken online, which means there is no paperwork needed so if approved money can be paid directly into your bank account fast.
Different Types of Instant Loans
There are different types of instant loans that anyone with a poor or bad credit rating might want to consider. The most suitable type would be based on the amount of money needed and how long to spread the cost of the repayments over.
A Payday Loan Offers a Small Sum of Cash Fast
A typical instant loan for anyone with bad credit is called a payday loan. This type of loan is often one of the easiest to apply for, and get approval for, even if you have a bad credit rating. This is because the amount borrowed with payday loans is usually small in comparison to personal loans. Lenders usually offer from £100 up to £500 with payday loans but this will depend on the lender and your circumstances. Some might offer more. The payday loan is an instant loan repaid on the next payday or with some lenders spread out over three paydays.
This type of loan is a high-interest loan but the interest is not spread out over the year as the loan is generally repaid in one or two months. In the past, there has been bad press about payday loans being extortionate; however, the FCA keeps a watchful eye on the fee and interest on the loans.
This type of instant loan is specially designed to provide a cash injection in emergencies when cash is low. As with any loan, you do have to make sure:
- You know exactly how much the loan is going to cost in total;
- When the repayment or repayments are due;
- The loan and the repayments are affordable.
Interest rates on the loan will vary from lender to lender, but we work alongside numerous lenders all offering competitive rates with your credit rating in mind.
The Benefits to a Payday Loan
Providing you have ensured that a payday loan is suitable for your needs and you can repay it back, there are some benefits to taking out this type of loan. These include:
- The application process is fast and easy;
- Lenders do not put too much focus on your credit rating;
- The payday loan is unsecured so you are not risking your home;
- It provides money is an emergency;
- It is paid back quickly;
- As small amounts are borrowed over a short period, the cost of borrowing is kept down.
Other Types of Instant Loans for Bad Credit Ratings
The payday loan is not the only type of instant loan you might be able to obtain approval for. Depending on how poor your credit rating is and the amount you want to borrow, you might be able to apply for a personal loan or short-term loan.
The short-term loan is similar to a payday loan in that it is not taken out over many years. The lenders we work with may be able to provide instant loans from £500 and up to £1,000 with flexible repayments based on your circumstances.
Personal loans are another option to consider, with this type of loan, you may be in a position to borrow a larger sum of money and spread the cost of borrowing. Lenders we work with might be able to offer you between £1,000 and up to £5,000. The repayments of the loan could be spread out up to 36 months.
When considering the term of the loan bear in mind that while spreading the cost of the loan over a longer period will generally make it more affordable each month, you will pay more interest. This should be weighed up to find a happy medium where the loan repayments are affordable but you do not take it out over too long a period.
Applying For Instant Loans Online
Applying for an instant loan online with our help is extremely easy. First, you satisfy some criteria to be eligible for a loan with one of our lenders. This means you:
- Have to be over the age of 18;
- Have a regular income coming into the home;
- Have a bank account in the UK;
- A debit card;
- Need to be able to set up a direct debit.
Why Is This Information Needed?
Our lenders will need to know that you have a regular income coming in each month so they know the loan is going to be affordable. Along with your income, they will also have to know what your outgoings are each month. Your outgoings are what you pay out each month. This is subtracted from your income and the rest is disposable income. If a lender thinks you have enough disposable income left over you will more than likely be offered a loan.
You have to have a bank account in the UK so that if the loan is approved the lender can pay the money directly into the bank account. The direct debit will enable you to repay the loan.
We do not offer loans ourselves but instead work with a panel of lenders who offer affordable loans. We can help to match you up with a lender and you only have to make one single loan application from our website.
All you need to do is:
- Fill in some details about yourself, including your income and outgoings;
- Choose how much you would like to borrow – £100 to £5,000;
- Choose how long you want to repay the loan over – 3 months to 36 months;
- Let us match you with one of the lenders from our panel;
- You check out the details of any loan we find suitable for your circumstances and sign up with the lender;
- The money will be paid into your bank account and you repay it back over the agreed term.
Do I Need A Guarantor For An Instant Loan?
You do not need to have a guarantor for a payday loan, short-term loan or a personal loan. However, there is a loan called a guarantor loan and this does require that you get someone to stand in as your guarantor.
The guarantor loan is easy to apply for and the lender does consider your income along with your credit rating. All lenders will look at your credit file before giving you a loan as this is the law in the UK. The lenders that we work with will consider your credit rating but put more faith in your ability to repay the loan as you have a regular income coming in. If your credit rating is particularly bad, this type of loan may be the only option available to you.
To apply for this loan you need to meet all the criteria for application for any of the other loans, along with getting someone to stand as your guarantor. It is important to choose your guarantor wisely as the person needs to have a good credit rating and be prepared to take over the loan repayments if you find you cannot manage them. This, of course, could put a severe strain on your relationship with that person. If they sign to be a guarantor, it is going to affect their credit rating as well.
Here at Bonsai Finance, we do not think your past mistakes should affect your current borrowing providing your circumstances have changed. The lenders we work with are of the same mind. When applying for any loan your credit rating is always going to be checked by the lender but some lenders are more lenient than others.
If you are looking for instant loans for bad credit let us help you. All it takes is one application and we can search with our panel of lenders to locate you the best deal. Our lenders have numerous loan options, whether you want to borrow a small sum of money and repay it within a month or two or you want a large sum and want to spread the cost over a year or so.