Small loans for bad credit are one way to borrow a small amount of cash if your credit rating is poor. Often when the unexpected pops up it is usually at a time when funds are running low and your next payday is still a long way off. Whether you want to borrow as little as £100 or as much as £5,000 a short-term loan could be applied for even if you have a poor credit rating.
Is There A Difference Between Short Term and Payday Loans?
You might have heard the terms, short-term loans, and payday loans and wonder if there is a difference between the two.
The payday loan allows borrowers to take a small loan that is usually repaid on the next payday, or the one after. This type of loan can come in very handy if you find yourself short of cash for something that has cropped up. Loans that fall under this category are generally up to £1,000.
Small loan or Short-term Loan
The small term loan can usually be taken out and repaid up to 36 months. Loans of this nature can usually be up to £5,000 with our lenders. If you take out a short-term loan, you pay it back over the longer-term than the payday loan.
In short, the most suitable small loan for your circumstances is going to depend on the amount you want to borrow and the length of the loan.
Out of the two types of small loans, the payday loan is the one that is generally easier to apply for and get approval for if you have bad credit.
How Do Small Loans Work?
We can help you find the most suitable small loan for your needs. Whether you want to borrow as little as £100 and pay the loan back in three months or you wish to borrow up to £5,000 and spread the cost of borrowing for up to 36 months.
Both types of small loans work the same. First, you need to make sure that you are eligible. To do this you need to meet the basic requirements, these are:
- Having a reliable source of income;
- Living in the United Kingdom;
- Having a UK bank account;
- Having a debit card attached to the bank account;
- Be in a position to set up a direct debit.
If you can say yes to all of the above, you are well on your way to applying for a small loan from our lenders. We do not provide loans ourselves. Instead, we work to bridge the gap between borrowers with poor credit ratings and lenders. We can match you up with lenders who offer competitive rates on small loans and numerous loan options.
Applying for Your Small Loan
Applying for a small loan with our help is extremely simple and you will know within minutes if you are approved. Just follow the steps below:
- Choose the amount you need to borrow and the term you want to take the loan over;
- Fill in your personal information;
- You find out if your loan is approved and you can continue on with the application;
- The loan is finalised online and you know how much you have to repay, including interest. Also, make a note of the dates for repayment;
- The money is deposited to your bank account.
The Benefits of Applying for Small Loans Online
There are many benefits to applying for small loans online as opposed to on the high street or by post. These include:
- The application for the loan is made entirely online in minutes;
- There is no paperwork involved;
- You get a decision very quickly;
- If approved the money is paid into your bank within a day or so;
- You can spread the cost of the loan for up to 36 months;
- You can borrow as little as £100 or as much as £5,000;
- We provide access to numerous lenders, so you get the most competitive rates.
What Are My Chances of Being Approved for Small Loans for Bad Credit?
If your credit rating is poor, you might be wondering what the chances are of being approved for a bad credit small loan.
In the UK, whenever you apply for a loan, whether a short loan or a longer-term loan, lenders have to look at your credit file. Your credit file holds your credit rating. The credit file is based on such things as how much credit you have, any late repayments, any missed payments and, how close you are to your credit limit on credit cards.
Lenders will check your credit rating. However, this is not as dire as it may sound. The lenders we work with take your verifiable income into account more than they do your credit rating. Lenders have come to realise that mistakes made in the past should perhaps be left in the past. People can change and if you have a regular income and can prove you can repay the loan; this takes precedence over your credit rating.
We cannot guarantee that the lenders we work with will approve your loan. However, we can promise that our lenders do consider everyone regardless of their credit history.
Bonsai Finance is experts in personal finance solutions matching borrowers with lenders who are offering the most suitable loans for different circumstances.
We can help you to find small loans for bad credit that are affordable based on your circumstances through an online application that is simple. Try our calculator today to find out how much you might be in a position to borrow.