Finding small loans for bad credit that are paid back quickly is relatively easy as lenders are more willing to offer small sums of money than large. However, if you find yourself in need of a larger loan you may be wondering what long term loans for bad credit are available. If this applies to you, what are your options?
So, is it possible to get a long-term loan with a poor credit rating and if so what are the options out there?
There Is No Guarantee For Approval
First, we would like to point out that no loans are guaranteed, whether long or short-term, with a good or bad credit rating. Approval for loans depends on numerous factors, including income and outgoings, verifiable income and your credit history.
Different Types of Loans – Short-term vs Long-term
There are numerous types of loans on the market but not all of them are loans that can be spread out over many years. Typical loans that people with a poor credit rating might find approval for easily are:
- Payday loans;
- Short-term loans.
You might have guessed by the name that neither of these loans is taken out over the long term. In fact, the total opposite as the maximum amount of time a short-term loan is spread over is 12 months. If you want a long-term loan, you are going to have to consider:
- A personal loan;
- A guarantor loan;
- A secured loan.
How Long Can A Long Term Loan Be Spread Over?
It is not unusual for long-term loans to be spread out for numerous years. In some cases, personal loans or secured loans may be spread out for 15 years. However, in the majority of cases, these are loans of many thousands of pounds.
Loans of this nature are not usually offered to people with poor credit ratings. Lenders are usually willing to offer small loans paid back quickly as the risk is not too great. However, offering a huge sum of money over many years would pose too big a risk to many lenders.
Of course, what lenders and what you think of as long-term loans may be quite different. You might think 12 months is a long time and be happy with a loan of this length.
If you want to borrow up to £1,000 and spread out the cost of borrowing for up to 12 months, it may be relatively easy to find approval. Lenders do not class this as being a long time to borrow. If you need to borrow more money, say up to £5,000 and spread the cost of the loan out over 36 months, it may be possible. When it comes to larger sums of money, you might struggle if your credit rating is poor.
Personal and Guarantor Long Term Loans for Bad Credit
There are two types of loans you might want to consider if you want to spread the cost of the loan out and your credit rating is less than perfect. These are personal and guarantor loans. One may be easier to find approval for than the other.
If you do need to borrow up to £5,000 and spread the cost of repayments for up to 36 months you might want to apply for a personal or guarantor loan.
We work alongside lenders who do consider verifiable income along with credit scores. This means that even with a poor credit score you might still be offered a loan.
Personal loans are more difficult to find approval for than guarantor loans but many people prefer them to guarantor loans.
A personal loan is among the long term loans for bad credit choices. This unsecured loan can be taken out for any reason. This means that you do not have to put anything up as collateral against the amount you are borrowing. This is why this type of loan is usually more difficult to get than a secured loan.
A Guarantor Loan
A guarantor loan differs in that you need to have someone who can stand as your guarantor. The person you ask as your guarantor has to be someone who knows you, either a friend or relative.
A guarantor has to be willing to take on the responsibility of repaying your loan in the event you fail to keep up the repayments. Therefore when you sign up for the loan the guarantor has to sign up at the same time.
In the past, there has been controversy regarding guarantor loans, as unethical lenders have not made it clear what is required of the guarantor. They can also cause issues in relationships if the guarantor actually has to take over the loan repayments on your behalf.
Preferably, the guarantor should have a good credit rating. They will also have to meet the same eligibility requirements as you do, which you can find below.
- Be older than 18 years of age;
- Live in the UK;
- Have a regular income;
- Hold a bank account;
- Have a debit card attached to the bank account.
The same eligibility requirements have to be met when applying for any loan in the UK however long or short term.
A Secured Loan
Another type of loan that might be offered to people with poor credit ratings is the secured loan.
Lenders are more lenient in offering secured loans because as the name suggests, you have to secure something against the money you are borrowing.
Generally, in the case of secured loans, you have to put something of value against the amount borrowed. Usually, this is a vehicle or your home.
The secured loan comes with less risk to the lender but more risk to you if you were to find yourself in a position where you could not pay off the loan. In this event, the lender could take you to court to take possession of whatever you put up against the loan.
Applying for Long-term Loans Online
While long-term loans may be more difficult to obtain than short-term small loans we may make finding a loan that much easier.
First, we want to get out of the way that we are not lenders. Instead, we work alongside a large panel of lenders to bridge a much-needed gap between people with poor credit ratings looking for loans and lenders.
There is no guarantee that you will be accepted for a loan long-term or otherwise. However, as we work with a large range of UK lenders who will consider offering loans to people with poor credit ratings, you do stand a fair chance of approval.
We know how difficult applying for a loan can be if you have a poor credit rating. The lenders we work alongside also take this into account. They know your circumstances might have altered and you might now be in a much better position to repay a loan. Lenders will consider a verifiable income and loan affordability. Of course, they will also want to make a credit check.
Why Lenders Check Your Credit Rating
All lenders in the UK will make a check of your credit rating if you apply for a loan. It does not matter how much you want to borrow or how long you want to take the loan over.
What does differ is how deep they will look into your credit file. If you only ask to borrow a small sum of money and you can repay it on your next payday, the lender is not going to be too worried about your credit past.
Of course, if you apply to borrow many thousands of pounds they are going to take a more in-depth look into your credit past.
This is not all doom and gloom though, as we have said the lenders we work alongside will also take your verifiable income into account and disposable income. Lenders do realise that your circumstances now may differ greatly from when you earned a bad credit rating.
The lenders on the panel we work with will work out your income and outgoings and take this into account along with your credit score.
Lenders do have to check your credit history as this is going to help them work out how big a risk you are when it comes to them being repaid. It will also help them to determine how much to offer you in a loan.
Some lenders may be willing to offer you a loan but not for the amount you request, they may offer a smaller sum if they think the loan would be more affordable. Of course, it is down to you whether to accept the loan or not.
You can apply for long term loans for bad credit with our help and gain access to a huge number of lenders in the UK who will consider all circumstances.
Here are some other interesting articles from out website:
Long Term Loans For Bad Credit | All you Need to Know
Long Term Loans No Guarantor Has The Answer To Everything
What Are The Choices For Long Term Loans for Bad Credit?