Millions of adults in the UK are faced with numerous financial hurdles and just like you, they look towards lenders to get financial boost. A majority of them also have poor credit, but still, get the money they need to sort out their financial emergencies. This is because modern lenders recognize the need for loans amongst people who might be denied such funds by numerous other traditional financial institutions. However, some of these modern lenders are opportunistic and you should exercise caution when getting the loans.
What exactly is Bad Credit?
Your financial details sourced from several credit institutions are normally compiled in a report and you are allocated a score depending on your creditworthiness. The scores averages from 300 to 850 and a higher score means that you have a better chance of getting a loan. However, a poor credit rating, which starts from 650 going downwards, makes lenders exercise more caution when you apply for a loan. Your credit score can take a plunge when you make ill-advised financial decisions such as maxing out your credit cards or defaulting on loans.
Accessing Short Term Loans Bad Credit UK
Even with bad credit, you will be surprised that numerous direct lenders are willing to give you short-term loans. Traditionally, it would be very difficult to get any loan with a low credit score because brick and mortar banks follow strict lending procedures. However, modern lenders use other methods to evaluate your creditworthiness before approving you for the short term loans they offer. The common requirements amongst such lenders are:
- You must be aged 18 years or above
- You should provide a verifiable source of income or means of repaying the loan
- You have to be living legally in the UK
- You should have a bank account where they can deposit the funds
Some of the common features of short term loans bad credit UK include:
- Quick processing and approval periods
You can get the funds you need within the same business day. If you are in urgent need of such cash, you will solve your financial emergency swiftly and conveniently.
- Zero Long term Commitments
Since you take the loan for a short period, the lenders rarely ask for tight commitments that can tie you down financially.
- Minimal Collateral
It is not a requirement to offer collateral for these short term loans as opposed to numerous other forms of traditional loans. As such, even when you do not have a verifiable asset or you do not want to jeopardize your house or car, you can still get the funds you need.
- Flexible repayment
You are free to pay back the loan in small manageable installments.
- Repay and borrow higher amounts
Lenders never impose restrictions and you can repay the money as soon as you can. When you repay, your loan limit increases and you can borrow more from the same lender the next time you have an emergency. Because they report your repayment details, your credit score is improved gradually.
Improving Loan Eligibility and Repayment Potential
Even with all the benefits that have been listed above, short term loans should not be considered as direct solutions to each financial difficulty. They may have high interest rates and this means that you have to compare several lenders to know those who give you the best deal. Also, these loans are only valid on the shorter while and long term financial hurdles might require other solutions.
To enhance your eligibility and ensure that your loan is affordable, consider the following tips:
- Review the criteria for eligibility
If you know the key aspects that a particular lender considers in their loan applicants early on, you can calculate the amount you qualify to get.
- Budget for repayment
The loan will lead to extra expenses due to the interest rates and you have to prepare yourself to cater for them starting from your next payday.
- Borrow an affordable amount
Even though you can get more money from the lender, the short repayment period makes a huge loan impractical. As such, take only the amount you can comfortably work into your budget and pay seamlessly.
From catching up with unexpected bills to repair of unforeseen car or house damages and even replacement of appliances or basic home tools, short term loans help to keep your life on track. At Bonsai Finance, we link you with numerous lenders who offer short term loans bad credit UK after a single application and help you get the best lender. It is more convenient than doing multiple applications on your own. Contact us today to also get reliable advice on how to improve your credit rating.