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About Low Credit Loans
4 Oct 2019

Which Type of Low Credit Loans Might Be Most Suitable?

It may surprise you to find out that just because you have a low credit rating it does not necessarily mean that lenders will turn you down for borrowing. There is a range of low credit loans out there that might be suitable and we can help to match you with a lender.

So which type of loans might be more suited to your needs?

  • If you need between £100 and £500 consider a payday loan;
  • If you want up to £1,000 think about a short-term loan;
  • If you need to borrow thousands of pounds, you might consider a guarantor or secured loan.

We have not included the personal loan in the list above, as generally, you need a good credit rating. This is not to say that you will automatically be turned down for a personal loan, just that the above loans may be easier to find approval for than others might.

A Deeper Look into Low Credit Loans

Now let us take a deeper look into the loans we have listed above.

Circumstances Where a Payday Loan Might Benefit You

You might be able to benefit from a payday loan if only a small amount of money is needed and you want it paid out fast. These types of loans can help you to get out of a tricky financial situation if you know you can repay the loan fast, within one to three paydays. The loan should be considered only for emergencies and they are not meant to be relied on from month to month as long-term solutions to a lack of money.

Loans can work if you need to pay a bill that was forgotten about, pay for repairs to a vehicle or pay to fix the cooker or freezer. They should not be taken out for frivolities such as paying for nights out to nightclubs as some students have been found to do.

Payday Loans Can Be Expensive if Not Repaid on Time

It is also important to make sure that you are able to repay a payday loan as agreed, over the short-term. They can get out of hand when continually rolled over with fees and more interest added on. Interest is calculated on a daily basis, so the faster you repay the loan the less you pay in total.

If you need to borrow between £100 and £500 a payday loan can be a suitable type of loan for your needs, providing you know you can repay in time.

If you need to borrow up to £1,000, you might consider a short-term loan. This type of loan gives more leeway in regards to the repayments as it can be spread out for up to 12 months. However, bear in mind the longer you take to repay the loan the more the loan is going to cost in total with interest.

Borrowing Over £1,000 with a Low Credit Rating

Obtaining a large sum of money if you have a low credit rating is going to be more difficult than if you want to borrow just a small sum of money. However, it is not impossible, but you might have to consider a guarantor or secured loan.

A guarantor loan or secured loan might not be the most suitable loan for everyone but can and have worked for many people.

Find Someone to Sign Up for the Loan with You

The guarantor low credit loans do require you to have a word with someone close to you about your finances and tell them you are unable to get a loan without their help. This is a very big responsibility to put on their shoulders and it has been known to cause issues with friendships. Of course, as they are the guarantor the responsibility to repay the loan falls onto their shoulders if for some reason you are unable to continue meeting the repayments.

Put Something Up As Security

A secured loan is another option for borrowing a large sum of money with a poor credit rating and this type of loan does not need a guarantor.

However, the downside is you need to offer something as security. This would be a vehicle or your home. This is a big risk as if your circumstances changed and you could not afford the loan repayments the lender could seek to take possession of whatever you put up as security.

How We Can Help You Secure Your Loan

We may be able to help you to secure a loan whatever your credit rating. Lenders will look into your credit past but when you apply for a small loan, they do not look too deeply. This is why people with low credit ratings favour smaller loans more and lenders are more willing to approve them.

The good news is the lenders on the panel that we work alongside will consider all circumstances and understand that circumstances do change. You might now be in a much better position to repay a loan and be more financially responsible. With this in mind, lenders will consider verifiable income.

We can make a search with multiple lenders, the lenders on the panel offers:

  • Some of the most competitive rates for your circumstances;
  • Be mindful of your circumstances;
  • Offer affordable loans;
  • Offer numerous loan solutions;
  • Provide you with an instant decision;
  • Provide you with everything you need to make an informed decision;
  • Allow you to complete your loan application online;
  • Provide a fast payout into your bank account.

All we need to begin looking for low credit loans on your behalf is some personal information. This includes your age, address, details about your income and outgoings and your bank account and debit card details.

You then get an instant decision and if we can match you with lenders, you can go to the website of lenders to finalise the details of your loan and sign up. The lender will then transfer the money into your bank account, often within hours.