The 3 Very Best Loans For People With Poor Credit
Desperately in need of cash but options limited because of a poor credit rating?
This all too common problem can now be easily addressed by exploring the bad credit loan market.
The following article has been designed to highlight the top 3 options to help make sure that you do not make costly mistakes by applying for the wrong loan!
Are poor credit loans available from my bank?
The short answer to this is no.
Loans for people with poor credit are typically available from alternative credit providers (i.e. those who provide loans or credit cards to people who have been turned away by mainstream lenders) who specifically target borrowers with a poor credit rating with their products.
These lenders have made a variety of different loans available to anyone with a poor credit rating, with payday loans often grabbing the headlines.
For additional information relating to credit ratings and why they are so important, please take some time to check out this recent Investopedia article – The importance of your credit rating
Option No. 1: Turning to Family & Friends
The most obvious and affordable option for bad credit borrowers is often one that is completely overlooked.
Turning to family or friends for a loan can often provide the ideal solution to short term financial issues.
Potential embarrassment or worries about future problems are common reasons for bypassing this option but there are definite ways around this.
Offering to make interest payments on any money borrowed or signing a loan agreement are 2 options which can help to provide peace of mind for both parties.
- Often interest-free
- No fees involved
- Reduced pressure
The Money Advice Service recently highlighted some of the pros and cons of borrowing from friends and family. To see what they had to say, please click on the following article: ‘Should you borrow from family or friends?‘
Option No. 2: Guaranteed Loans
If your family or friends would like to help you but cannot or will not lend you the money personally, a guaranteed loan may offer the perfect alternative.
Guaranteed loans work by offering anyone who can find someone to back their loan application the opportunity to apply for a loan of typically up to £10,000.
The person backing your loan will not be expected to make any payments unless the borrower defaults on payments.
- Unsecured personal loans available from sums ranging from £50 to £10,000
- No credit check for the borrower (the credit rating of the person guaranteeing the loan will be factored into the application)
- Interest rates vary but for a loan of £1,000 and upwards, an APR of approximately 50% is common.
Do you know the difference between an unsecured and a secured loan? Click here to find out.
Option No. 3: Doorstep Loans
Doorstep loans are typically aimed at borrowers who wish to take out a relatively small loan of between £100 and £500.
As implied in the name, doorstep loans work by having a designated agent of the lender coming to your home on a regular basis to collect the repayments in person.
- Unsecured short term personal loan
- Designed to cut through red tape to allow access to a sum of up to £500
- Although much cheaper than payday loans, doorstep loans will typically be available with APRs of between 275% and 550%
Doorstep loans are often referred to as home credit loans. You can find out more by clicking here.
Do you know your current credit score?
If the answer is no, we highly recommend visiting one of the many UK credit agencies to obtain your credit report.
Unlike previously, you will now be able to obtain view your credit score without having to pay for the privilege. This will help to offer some insight into the type of options that may be available to you.
Looking for a loan of between £500 & £10,000?
Let us do the hard work for you by submitting a single easy to complete application to multiple lenders with the click of a button!
If you have someone in place who is prepared to act as a guarantor for your loan, we can help you access some of the most affordable bad credit loans available in the UK.
Note: Click on the following link if you would like more information about being a loan guarantor
Our loan calculator will help you to work out exactly how much you can afford to borrow and our application form will allow you to submit your application to the UK’s best specialist bad credit lenders.
- You will not be obliged to take up any of the loans offers that you receive and we will not charge you for our services
- You don’t even need to worry about your credit rating taking a hit! Your credit file will be checked to just make sure you do not have an IVA or are Bankrupt but your credit score does not matter.