If you have a bad credit rating and you have tried to borrow money in the past you may have found yourself turned down repeatedly. This can leave you deflated and at a loss if you need money fast. Luckily, online loans may provide a better option than going down the traditional routes, if you have a poor credit rating. So what are the best loans for bad credit?
Online Loans Are the Easiest Way to Find a Bad Credit Loan
Well, the easiest way to find a loan is online. Before we talk about the types of loans most suitable for people with bad credit, we would like to point out the benefits of applying for loans online with our help. While there are many benefits, we have chosen the top 10.
- They are quick and easy to apply for;
- No paperwork involved;
- There is a wide range of loans available;
- We can put you in touch with a large panel of lenders;
- You only have to make a single loan application to access numerous lenders;
- The lenders we work with take verifiable income into consideration, not just credit ratings;
- Loans come with some of the most competitive rates;
- You get an instant decision;
- Money is paid out fast;
- Loans are available from £100 to £5,000.
Different Types of Best Loans for Bad Credit in the UK
The most suitable loan for you is going to depend largely on how much you need to borrow and when you can repay the loan.
Loans generally come with limits. This applies to how much you might be able to borrow, and the term of the loan repayment.
Payday Loans for Up to £500
Payday loans are also called quick loans or same day loans due to the fact they are one of the easiest types to apply for and find approval even with poor credit ratings.
The reason being is that you will be borrowing between £100 and £500 and repaying the loan and interest in full within three paydays.
Depending on how much you borrow and affordability you could clear the loan on one payday, which is the cheapest way to borrow. However, you might choose to spread the repayments over two or three paydays. This is going to mean you pay more in interest of course, with interest added onto the loan daily.
Many people apply for payday loans when met with a small financial outlay and they need money before their next payday comes around. This could be to pay for unexpected repairs or a bill.
Bear in mind that if you take a payday loan out over one payday the total amount of the loan and interest is going to be taken in a single payment on your next pay date. Therefore, you need to make sure that on the date or dates, you have enough money left over to live on for the month.
Short-term Loans Offer Up to £1,000
Short-term loans may be the best loans for bad credit ratings if you want to borrow up to £1,000. This type of loan can be stretched out for a longer-term than a payday loan but not as long as personal loans or guarantor loans.
Lenders may allow you to repay the loan for up to 12 months. This makes borrowing a larger sum more affordable.
Interest is going to be added onto the short-term loan so check the APR as this determines the interest rate; it stands for annual percentage rate. This is the rate payable over the year and the lower the rate the less interest the loan accumulates. Of course, you are not going to get the lowest APRs as these are offered to people with good credit scores.
However, by allowing us to search with a panel of lenders you can gain access to competitive interest rates and affordable loan options.
Guarantor Loans for Borrowing up to £5,000
If your credit rating is very poor, you might want to consider a guarantor loan. This is a personal loan with a guarantor behind it. It is an unsecured loan but is generally easier to find approval for than a personal loan if you have bad credit as someone is standing by your side to guarantee the loan repayments.
A guarantor loan may allow you to borrow up to £5,000 and spread the repayments for up to 36 months.
When considering this type of loan you have to consider:
- The APR is usually high to reflect the fact that you are seen as high risk;
- You do need someone to stand as your guarantor;
- The guarantor needs to be a friend or family member but not a spouse or partner;
- The guarantor is going to be liable for the loan repayments if you fail to make them;
- The loan is classed as a longer-term loan as you are repaying it for up to 36 months. Bear in mind that a lot can happen in this time. While the loan might be affordable when you apply for it, this may not be so a year or so down the line;
- Both you and the guarantor need to meet the general eligibility checks for borrowing in the UK. The guarantor should also have a good credit rating.
If you want a small sum of money, a payday loan or short-term loan might be the most suitable. For a larger loan with a bad credit rating, you might consider a guarantor loan.
Providing you are at least 18, have a UK address, bank account and debit card, plus a regular income, you can apply for a loan online with our help.
The best loans for bad credit ratings are loans that are affordable to you, which you know without a doubt that you can repay. The lenders we work alongside are going to make an affordability check and they will take your income and outgoings into account.
Here are some other interesting articles from out website:
10 Best Loan Bad Credit Companies
What are the Best Loans for Bad Credit?
It Is Possible To Obtain Bad Credit Loans in the UK