Borrow up to £995
Rates from 278% to 1576%
3-12 month repayment
From £1,000 to £25,000
Rates from 4.7% to 278%
3-36 month repayment
Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed).
The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances.
† Not all loan types and amounts are eligible for 20 minute payouts. Your chosen bank may increase the time you receive the funds.
Bad Credit Loans: What are the options that you can consider in the UK today?
Are you concerned that you’re past credit mistakes will become a major hurdle in securing extra funding from a legit lender? Can you even access a loan and get approved?
The truth is taking out a loan would certainly be more challenging if there are blemishes in your credit history. It may also not be the ideal route to take and perhaps thinking of ways to rebuild your credit score should be your first priority. However, if you really need to take out a loan to deal with various essential needs and expenses, then there are bad credit loans that you can consider.
1.) Online Payday Loans
Majority of borrowers in the UK would turn to payday loans when they find themselves short of cash to tide them through their next payday. These types of bad credit loans are offered in small amounts anywhere from a hundred to a thousand pounds with short-repayment periods from a month to 3 months.
The best thing about these bad credit loans is that you can easily access them online from numerous reputable sources. Simply type “payday loans UK” and you will instantly be forwarded to a list of potential lenders that can provide you with instant funding. What’s more, you can complete a payday loan application in just 15 minutes and get an approval response in an instant. And once you are approved, the money that you requested for will be transferred to your account in the same day or the next business day.
2.) Doorstep loans
Doorstep loans like Provident are also bad credit loans that you can look into. While short-term online loans like payday loans will deposit that money to your account, door step loans will deliver the loan in cash right at your very doorsteps. An agent representing your lender will then visit your home every week or in a fortnightly basis to collect the payments.
If you are someone who doesn’t have an active bank account, then the bad credit loans may be the ideal options to your situation. You can also make an application for a doorstep loan in a lender’s website. Once you have completed the process, an agent will then come to your home to iron the final details of your loan deal and hand you the cash once everything has been agreed upon.
3.) Secured loans
If you have a poor credit history but want to obtain large amounts of credit with longer payment terms and cheaper interest rates, secured loans may be the ideal bad credit loans for you. Unsecured loans like personal loans are generally more costly to borrowers with low credit scores because of the risk that the lender will have to take in the agreement. With a secured loan, there is a collateral that the lender can turn to if you default from your repayments making it less risky for them to grant you large amounts of credit for longer repayment periods and lower interest rates.
Two viable secured bad credit loans that you can consider include:
- Logbook loans. With these bad credit loans, your vehicle will serve as security to the amount of credit that you borrow. You can generally maintain driving your car throughout the entire period of the loan and there is no need to deposit your vehicle so you can obtain funding. So long as you manage to stick you your repayments, the vehicle will still be yours after you have paid off your balance. However, if you default from your repayments, there is a real possibility that your vehicle will be repossessed by your lender.
- The bad credit loans will allow you to borrow money with a high value item as collateral. There is a wide assortment of items that pawn shops consider, from jewelleries, gadgets like cameras and smart phones, and sometimes even equipments like welding machines and instruments like guitars. You can find plenty of brokers online and you can also try looking at your nearby town or city.
4.) Guarantor loans
The bad credit loans can be the perfect financing solution to people with poor scores and even more so to people who have none-existent credit histories – those who have yet to take out a loan or use a credit card. This is because guarantor loans are not based on the strength of an applicant’s credit score but on the presence of a guarantor who basically guarantees that the loan’s repayments will be made.
The first thing that you need to do before you make an application is to find someone who would be willing to play the role as guarantor. The person will be the second option for repayment when you, as the primary payer, will no longer be able to maintain it.
Guarantor loans are also cheaper compared to the other bad credit loans mentioned in this discussion and have more flexible borrowing terms and conditions overall. Depending on your lender, your guarantor may need to be a UK homeowner to become accepted.
Choosing the right bad credit loan lender
If you scour the web for bad credit loans, you will find that the number of reputable lenders is overwhelmingly abundant. Picking the usual names like Wonga and QuickQuid might be the safer bet but there are newer lenders that can provide you with better rates and borrowing terms. The choice is up to you but it’s always a good idea to shop around, compare the different options, and choose the bad credit loans that provide the cheapest rate and at the same time is ideal to your needs and present circumstances.
In the end, always choose a lender that is honest and legit. Loans sharks and scam sites real so make sure to deal only with licensed lenders who are certified by the FCA or Financial Conduct Authority. It would also be best to ask around and visit review sites and forums so you will know who to trust and what the best bad credit loans are, given your needs and present circumstances.