There are many choices of online loans for bad credit along with numerous benefits to applying for loans online as opposed to a high street lender. How people apply for loans today has changed greatly when compared to loan applications during the 60s.
While the payday loan has been one of the most popular types of loans and changed the way people borrow, it is certainly not the only type of loan available online today. Other loans that can be applied for online are:
- Short-term loans;
- Personal loans;
- Guarantor loans;
- Secured loans.
Online Loans for Bad Credit Gained Popularity with the Rise of Payday Loans
It used to be that loans were a long-winded product to apply for and the chances of getting approved by bank managers were extremely difficult unless you had something of value to put up against the loan. Today these are called secured loans.
Online loans gained in popularity when home computers and broadband internet became more affordable and accessible. Payday loans became the new way of borrowing in the year 2000 and the way people borrowed began to change.
Payday loans became extremely popular from 2007 to 2013 as more companies began offering loans as they saw huge profits. By 2010, the payday loan market had reached billions with 1.2 million having taken out a payday loan from the comfort of their own home.
Payday Loans Have Criteria less Strict
One of the biggest draws to applying for payday loans online for those with a poor credit rating is the fact that the criteria is less strict.
Bonsai Finance for instance work with a panel of lenders who consider the person’s current circumstances more than their past, although lenders do have to check credit ratings of those who apply.
As payday loan borrowing is typically in the range of between £100 to £500 and the loan is repaid within a period of one to three months, lenders are not as strict as when offering loans of substantial sums spread out over numerous years.
Online Loans Can Be Applied For In Minutes
Before loans were made available online if a person wanted to borrow, they had to apply in person at their bank or another high street lender after making an appointment. They then had to explain why they wanted the loan and have their background scrutinized along with their income and outgoings. Often they would have to wait for a decision and then if they were approved wait for the money to be paid into their bank account.
Today online loans mean that people will know within just minutes if they have been approved for a loan. If they are approved the money may be paid into their designated bank account within hours or a day or two.
Online loans require some criteria to be met and a few details to start the loan process, such as:
- The person applying has to live in the UK;
- They need a UK bank account;
- Have a debit card attached to the bank account;
- Be over 18 years old;
- Have a regular income coming in. This can be from work or benefits.
Get a Helping Hand Applying For Loans Online
Today it has never been easier to request loans online. Here at Bonsai Finance you can make a loan application, for a loan from £100 to £5,000 and spread the cost of the repayments from one month to 36 months.
We are not a lender. Instead, we work alongside lenders and those looking for loans to match the two together. We give people looking for loans a helping hand to find the loan most suitable for your need.
The lenders we work with all offer loans online that mean applying for a loan is fast and easy. From just one loan application, we can match you up with a panel of lenders. This means that you do not have to keep making applications if a lender turns you down. It also means the risk to your credit rating from applying is kept to a minimum.
The alternative approach would be to search yourself using a search engine for online loans and then make a single application yourself with your chosen lender. The downside to this is that it takes time and effort and the application will be noted on your credit file whether you get the loan or not. You would then have to start the whole application process again with a different lender, and so on until you found a lender that approved your loan. When you get a helping hand from us, this is not the case.
Types of Loans Offered Online
Today anyone can apply for a loan online whether they want to borrow just a small sum of money for an emergency or need a larger sum of money fast and spread the repayments out longer.
Anyone who wants to borrow a large sum and spread out the repayments but has a very bad credit rating might want to consider a guarantor loan. This is among the easiest types of loans to get approval for when a large sum of money is needed. You do have to find someone willing to stand as guarantor and this needs to be someone over the age of 18, with a regular income, a good credit score, and who would be willing to take on the repayments if you were to find you could not repay the loan.
Personal loans are unsecured loans that even those with a poor credit rating may be able to get approval for. Personal loans may allow you to spread the repayments of a loan up to 36 months and borrow up to £5,000. Whether or not you get approval for an unsecured loan, would depend on the lender, your credit rating and other factors.
Online loans for bad credit have changed the way that people with poor credit can get access to loans. Loan applications take minutes and funds can even be paid directly into a bank account within hours or days.