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From £1,000 to £25,000
Rates from 5.7% to 278%
3-36 month repayment
Borrow up to £3,000
Rates from 278% to 1576%
3-12 month repayment
Representative example: £500 borrowed for 5 months. Total amount repayable is £991.85 in 5 monthly instalments of £198.37. Interest charged is £491.85, interest rate 236.1% pa (variable). Representative 481.6% APR.
These loans can often be quite difficult for people to get as most Unsecured Loans from banks will build societies or credit checked upon application banks and building societies tend to have a very strict credit score requirement if you fall below this your loan will be instantly declined. This is obviously why people with poor credit scores will rip will struggle to get a loan from the banks will build societies. In this article I will go through some the options you will have to get a loan where you can get a loan from and some of the risks within that market unfortunately the poor credit market is renowned for being full of scammers this all going to greater detail further down the article.
Options for bad credit loans?
Don’t despair there are still options within the markets for you just need to know where to look personally banks and build societies are probably not gonna fund your loan I wouldn’t even bother looking at them this time but what you can do is look at some the private equity firms or private lending firms that are in the market that specialises in looking after people with poor credit one thing to note at this point is payday loans are probably not the best option for people as they tend to drive you further into debt if this is a link you are currently struggling with I would suggest you speak to one of the free government provided debt release help services.
As I said before there are options out there for people with bad credit I would suggest firstly a guarantor loan this is a loan that is backed up by a friend or family member that trashy to make repayments and they have a good clean credit history and will pose as your guarantor this basically says should you struggle with the repayment they will be happy to help you make that payment this is incredibly important for you as it will reflect in the APR that you are quoted should you look for a loan without a guarantor the APR will be much higher the guarantor brings their good credit score with you and pushes that APR down for you in in short for the lender it shows that you are more likely to make repayments each month as should you not make those payments the guarantor will have to pay or their credit score can also be affected this is also the same for payday day loans.
Secured bad credit loan these are also options are coming to to the market in form of a logbook loan these loans can be secured against your vehicle as long as you are only out right this also will reflect on your APR as you are backing up your loan should your payments be missed please note that this may put your vehicle at risk and a logbook loan company that does lend you the money is well within their rights to take the vehicle and sell it to make up the money that they have missed out this is obviously an extreme circumstance and hopefully this will never happen.
If you don’t want to secure a loan against any of the property or user guarantor there are still options available to you just do need to bear in mind that your monthly payments meet will be quite high for these loans so you need to make sure that you can repay these loans before you go and take the loan out as failure to repay the loan will cause your credit score to fall even further and your creditworthiness in future being even lower.
As I mentioned earlier this market is known for having a few people out there looking to scam you say this is that you need to be aware if people are calling you once you main application asking for an upfront fee to confirm your loan or to pay out your loan this is something that I would always be very sceptical of genuine big companies don’t require any extra money to fund your loan as they are making their money through the interest rate that you are going to be payback.
If somebody does call you and ask for this money I personally would suggest you do hang up on them and do not speak them again there are many options out there in the market that doesn’t involve you having to pay any money out at the start.
Loans in the unsecured market currently are on the rise due to micro-lending businesses performing well for example one micro funding business that I spoke to this morning advise this month alone they have lent up to £75,000 to customers already this is only the 13th of the month there is a lot of opportunity for this to go even higher this says to me that the market is on the rise and the rates that customers are paying aren’t as bad as they used to be. This is probably because of the upturn within the UK economy and the 0% interest rate that the bank has been charging this to giving customers a little bit more money and financial freedom allowing them to make their payments which then in turn allows the micro-lending business to grow.
This compared to traditional bank is quite a surprise traditional banks are currently suffering 40% of their loan book is currently seen as bad and this is slipping slowly and slowly even higher this is quite concerning as this can cause banks to go bust which we have seen in the past for example Barclays who had to have a government-funded bailout.
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Hi There My Names Martin! I’m a huge sports fan fancy myself as the next Lionel Messi.. Ive been writing for the last ten years mainly in the financial niche.