There are such things as loans for poor credit score that people with poor credit may be in a position to apply for. Here we will look into options for borrowing with a poor credit score and why your credit score might be classed as poor.
First, What Are Your Loan Options?
Anyone with a good credit score will have no issues with obtaining a loan that offers some of the best deals possible along with having low rates of interest. However, this is not so if your credit rating is poor.
In this instance, you might want to consider the following options for loans for poor credit:
- A guarantor loan;
- A short-term loan;
- A payday loan;
- A Personal loan.
The above are all options for loans that you might be eligible to apply for depending on your credit score. A personal loan might be offered if your credit rating is not too bad but not excellent. The guarantor loan might be most suited if your credit rating is extremely poor and the payday loan or short term loan might be suitable if you have a poor credit rating but want to borrow a small amount of cash.
How Your Credit Rating Affects Borrowing
Your credit rating affects your borrowing as the lender sees you as a risk. Several factors determine your credit rating and these include:
- The total amount of debt owed. This might be through credit cards, store cards, and loans;
- The number of credit accounts you have open;
- How many late payments you made;
- Whether or not you have CCJs against you.
Lenders check your credit score to find out the above and will then deem you responsible as a borrower or a risk.
Our range of lenders will look into your credit score but they will not look too deeply and focus more on whether they think you ‘re able to repay the loan based on your income and outgoings.
Which Types of Loans for Poor Credit Score Might be Suitable?
The most suitable loans are going to depend on the amount of money you need to borrow and how you want to repay the loan.
Can You Get A Guarantor?
A guarantor loan is perhaps one of the easiest types of loan to apply for if your credit rating is very bad. With this loan, you find someone to act as the guarantor and if you cannot make the repayments, the responsibility falls on the guarantor.
Do You Want A Loan Over the Short Term?
A short term loan might be applied for if you want between £500 and £1,000 and want to spread the cost over 6 to 12 months.
Do You Want Just A Small Loan?
A Payday loan is a small loan that is repaid back quickly. You might be able to borrow between £100 and £500 with the payday loan and repay the loan within one to three months on your paydays. The payday loan generally has a higher rate of interest attached to it but the important thing to keep in mind here is that the loan is repaid quickly. The interest rate shown is the APR (annual percentage rate) but the payday loan is not paid back over the year.
If looking for loans for poor credit score we can help you to find the most suitable option for your circumstances. We work with lenders who offer a range of loans that are affordable and have a competitive rate even for those with a poor credit rating. We can match you with our panel of lenders so all you have to do is make one application.