You need to get hold of a small amount of cash fast but your bank account is close to zero and your payday is some time away. So what can you do? Well, one answer would be to apply for a quick loan. However, with a bad credit rating what are your chances of obtaining a loan, never mind a quick loan? Actually, they might be better than you might have thought. There are lenders who might be able to offer you quick loans bad credit considered and you may be able to get funds from such a loan paid into your bank account on the same day.
Are There Specific Types of Quick Loans?
Thanks to loans now offered online, the majority of loan applications are quick with funds paid out fast. However, there are two loans typically associated with being quick and suitable for those with a less than perfect credit rating and these are:
- Payday loans;
- Short-term loans.
These are by no means the only loans that people with poor credit may apply for and find approval but they are two of the easiest.
Other loans include a personal loan and a guarantor loan. However, it may be more difficult to obtain a personal loan with a bad credit rating. If lenders do offer personal loans for bad credit they generally come with high rates of interest to reflect the fact the lender is taking a risk.
What Makes Them Quick Loans?
There are several reasons why the payday and short-term loans are considered quick loans that people with poor credit ratings may be approved for.
- Both loans only offer a limited amount of money which lenders consider to be small sums;
- Both are repaid back fairly quickly so the lender does not see you as being a big risk;
- The loans can be applied for online without paperwork involved so there is no waiting around;
- The loans come with an instant decision. This is essential when you are faced with a financial outlay that is causing stress and worry;
- If approved for a loan the funds from the loan are often paid out within hours of your application.
Will Lenders Check My Credit Rating When Applying for Quick Loans Bad Credit?
There is often a misconception that lenders will not check credit ratings when applying for small loans.
However, all ethical lenders will make a credit check. The difference with small loans is that some lenders will not make an in-depth check. This means they will not look too deeply into your credit past.
We work alongside lenders who are going to look at your credit rating, but who will also consider verifiable income when you apply.
With small loans that are repaid quickly, lenders do not see you as being a big risk. More so if you have a regular verified income and you can prove you have enough money coming in to make the repayments.
Lenders will focus on your income and outgoings to decide if the loan is affordable.
Other Things Lenders Check
To be able to apply for any UK loan you do have to live in the UK. Lenders will ask for your address when you apply for the loan.
No lender in the UK will offer a loan to anyone under the age of 18 as it would be unethical to do so. Lenders will ask for your date of birth when you apply for the loan.
Lenders will check that the loan you are applying for is affordable. You must have a regular income paid into a bank account in the UK and the lender will check your income and outgoings to determine affordability.
Lenders want your bank details when you apply for your loan so you need a bank account in your name in the UK. They need this information because they will pay funds from the loan directly into your bank account if approved. Lenders also take the repayments from your account on the dates agreed.
What Is A Payday Loan?
Out of all the loans on the market, the payday loan is usually one of the easiest types of loans to find approval for if you have a poor credit rating. This is because:
- The amount of money you are asking to borrow is small;
- You will be repaying the loan back very fast.
Borrow £100 to £500 Pay Back in One to Three Months
Lenders may offer you between £100 and up to £500 with a payday loan. While this might seem a large sum to you if you do not have it until next payday, to lenders it is small. Bear in mind, that lenders offer personal loans to people in sums of thousands of pounds, spread out over many years. This brings things into perspective when we say a payday loan only offers a small sum of money.
With a payday loan, you decide how much you want to borrow, up to the limit. You then decide how long to take it over. The maximum time you can borrow with a payday loan is three months. This means you spread the cost of borrowing over three paydays.
The Faster You Pay the Loan the Less It Costs You
If you choose to repay the loan on your next payday, you will pay the total sum borrowed and any interest that has accumulated up until that time. Interest on payday loans is calculated on a daily basis so the faster you pay off the loan the less it costs in total.
If you choose to spread out the loan, the lender will take a portion of the loan back over three paydays. Again, repaying the loan back earlier will save you interest and make the total cost of borrowing cheaper.
What is important to bear in mind with payday loans is that you can afford to clear the loan off as agreed and you do not roll the loan over. This can lead to spiralling debt.
So, a payday loan is among the quick loans bad credit considered loans as you borrow a small sum and pay it back within three months.
What Is A Short-term Loan?
The name of this loan says it all. It is a loan taken out and repaid over the short-term. However, what do lenders class as a short term?
This type of loan can be spread out for longer than the payday loan and you can borrow more, depending on your ability to repay the loan of course.
Borrow Between £500 and £1,000 Pay It Back For Up to 12 Months
Most lenders offer around £500 to £1,000 with short-term loans and allow you to spread out the loan for up to 12 months.
This loan falls in-between the payday loan and personal loan in regards to how long you can borrow. With a short-term loan, the repayments can be spread out, which can make the monthly repayments more affordable if you are borrowing up to the limit.
On saying this, the longer the loan the more interest will be paid in total and the more the loan is going to cost. Try to find a fine line between keeping the monthly repayments down and not paying too much out in interest.
The lender will take the loan repayment back over the term you agreed in monthly instalments, including interest.
Guarantor Loans for Bad Credit
While we do work alongside lenders who consider all circumstances there may be times when the panel of lenders we work alongside cannot help you. You might also need to borrow more money than what a payday loan or short-term loan offers but with a bad credit rating, you are finding it impossible.
A personal loan might be out of the question if your credit rating is extremely poor. In this case, you might want to consider a guarantor loan.
With a guarantor loan, you may be able to borrow up to £5,000 and spread the repayments for up to 36 months.
While this type of loan does not generally fall under quick loans, you can apply for the loan online which speeds up the process.
The biggest downside to the guarantor loan is that you need to ask someone to stand as your guarantor. In the event you cannot meet the repayments, the guarantor takes over the loan repayments until the loan is cleared. This may not be ideal, but it is an option to consider if all other options have been closed off to you because of your credit rating.
We work alongside a panel of lenders who will take all circumstances into account. Lenders will take verifiable income and your credit past into consideration when deciding if they can offer you a loan.
All of the lenders on the panel will check the loan is affordable and offer some of the lowest interest rates for your circumstances. There is no one loan fits all and lenders offer numerous loan options. Apply for quick loans bad credit considered with our panel of lenders and you get an instant decision and quick payout.
Here are some other interesting articles from out website:
Quick Loans No Guarantor With Instant Decision
What are Quick Loans Bad Credit? Everything You Need To Know
Two Types of Quick Loans Bad Credit to Consider