Generally, if you have a bad credit rating the easiest types of loans to be approved for are short-term loans and payday loans. However, the downside with these loans is that they only offer a small amount of money and the loans need to be repaid within a year. But what about the choices for long term loans for bad credit. Is it possible to get a long term loan if you have a poor credit score?
How Is A Long Term Loan Defined?
A loan might be considered long term if you wish to borrow a substantial sum of money and repay it for up to 36 months or more. This would depend on the lenders terms and conditions.
It is going to be more difficult to find a loan that offers many thousands of pounds that you can spread the repayments out over more than 36 months if you have bad credit. The lenders we work with offer loans of up to £5,000 to people, many of whom have flawed credit, and allow the repayments to be spread out for up to 36 months. Any more than this and over a longer term and you may struggle to find a loan that is unsecured.
The Types of Long Term Loan
The types of loan that might be available to people with poor credit are:
- A personal loan;
- A guarantor loan;
- A secured loan.
The most suitable option of loan may depend on the state of your credit rating and the amount of money you are requesting to borrow. When applying for loans with bad credit, you do have to be realistic. No lender is going to be willing to offer you a loan upwards of £10,000 if you have a bad credit rating. They may not even offer you a loan for this amount of money if you have a guarantor behind you. So keep your expectations grounded and do not waste time and affect your credit rating negatively by asking for something that is beyond your reach at the moment.
If you do have a poor credit rating start off borrowing just a small sum of money, and repay back over a shorter term if possible. By doing so, you can help to rebuild your credit rating and get access to loans over longer terms that offer more. However, in some cases, you cannot wait and may need to ask to borrow more now and in this case; you might be better looking for a guarantor loan.
The lender may be more inclined to offer you a larger sum of money over a longer term if you take out a guarantor loan. This means you ask someone close to you, either a family member or friend, to stand as your guarantor. The lender then has peace of mind that they would then take over repayments if you faltered on the loan. Of course, this would put you in the bad books with the lender and the person who stood guarantor.
While a guarantor loan may not be the ideal scenario, it may be the only way to spread a loan out over a longer term if your credit rating is particulary poor.
A Personal Loan
If you require a loan to purchase a new car, undertake much needed home improvements, consolidate loans or pay for a wedding you might want to consider a personal loan.
It may be harder to obtain a personal loan without having secured something against the amount you are borrowing but it is not impossible. It is going to depend on the lender, with some lenders being more lenient than others are. Thankfully, we work with a panel of lenders who do consider your current circumstances and your ability for repaying the loan, more than any issues you have had in the past that have affected your credit rating.
Personal loans are usually unsecured loans that can be stretched out over a long period, giving you chance to repay the loan in easy monthly installments. However, depending on your credit rating it may not be possible for the lender to offer you an unsecured loan. In this case, the lender may offer a secured loan.
With the secured loan you are required to have something as collateral and put this up against the loan. This is usually your home. This can be a risky approach to borrowing as you never know what is around the corner and if your circumstances changed before the end of the loan, you might lose your home if you cannot repay the loan.
Before Applying For Long Term Loans For Bad Credit
Before applying for long term loans first work out how much you would like to borrow and then realistically work out how long you need to take the loan over. When considering the latter you will need to take into account that the longer the term of the loan the more interest you will pay. On the other end of the scale, if you want to keep the actual loan repayments down you can spread the loan out over a longer term.
Before you make an application for a long-term loan it can pay to check your credit file yourself to make sure that there is nothing in it that should not be. It has been known for closed accounts to remain open on credit files, loans that have been repaid to still be on the credit file and mistakes made by lenders. All of this can have a negative impact on your credit file. If all is not as it should be take measures to put it right and improve your credit score before applying for a loan.
Numeracy skills have been linked with credit scores, with those being good with numbers having better credit than those who struggle.
Brushing up on maths can actually help you to handle money better and have a better credit score.
You can apply for long term loans for bad credit through us. We will help in matching you up with one of the lenders we work with who offer loans for people with poor credit ratings. Just tell us how much you want to borrow, when you want to repay and we will do the rest.