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A loan for bad credit may be the only option to people with poor credit histories. If you fall into this category than you are on the right page. It doesn’t take much for your credit rating to be damaged, a few late payments or a default can make you a non-attractive candidate for many of the mainstream lenders, even though you know you can comfortably meet the monthly payments.
As a rule, the interest is a lot higher with bad credit loans this is because there is a higher risk element involved for the lender and so the interest reflects this. Bad credit lenders will also have a point where they cannot lend to borrows if for example if someone has been made bankrupt or a high number of CCJS, of course any type of financial fraud completely rules a person out.
Some lenders will have both types of financial products available, a mainstream lending product and a product that offers a loan for people with poor credit history. The product will be similar but the terms and APR will be different.
If you are looking for a short or long term loan and your credit is either poor or very bad you will come across different options and some are a little misleading. Let’s look at some of them.
While this is possible if your credit is average to only slightly poor, you will be unlikely to find any loan companies for bad credit that will offer you a loan without a guarantor if you have adverse credit. If you manage to find a lender that offers non-guarantor loans to people with very bad credit histories, it will probably be because the APR is extremely high. It is even possible to pay back nearly double on what you have borrowed. These companies have APR because they know a percentage of people will fail to repay the loan but those that do will make it financially viable to offer the service without a guarantor.
Payday loan lenders are usually more lenient due to the fact the loans are usually smaller and are repayable on your next payday. Typically, these are to bridge the gap between paydays and many people use them to cover an unexpected bill that arises. Although not classed as a bad credit loan if you only wish to borrow a few hundred pounds or less and your credit isn’t perfect you may still stand a chance of being excepted for a small bad credit payday loan.
You may have been searching for this or seen this online, in reality in order for lenders to deem if you are a match for their product they will have to perform a credit check. There are cases in which the bad credit lender will not consult a credit reference agency for you but for your guarantor instead. There are rarely lenders that will offer unsecured loans for bad credit with no credit check although.
When you are looking for the best loans which cater for poor credit histories, it can be confusing when you are looking over the hundreds of search results on Google and then visiting all the bad credit websites. Its difficult to know who to choose. If you using a broker who sends your info to hundreds of bad credit lenders you may end up with a huge amount of emails and phone calls, so be mindful of this. Remember never pay a fee to a broker to put you in touch with a lender as there are plenty of free options out there. At First Quality Finance, we do not charge any fees and never require your bank details.
Bad credit loans can really be used for anything as you are borrowing the funds as an unsecured loan and most lenders do not have a stipulation to what you spend the money on. The only difference to this is if it’s a car finance agreement in which case the funds get transferred direct to the dealership.
Many people use their personal loans for bad credit the same as any other loan such as household repairs, holidays, weddings, or debt consolidation, although make sure the repayments are smaller than the collective debt you owe for this to be viable.
If you are looking for a large bad credit loan over a long period, you may have to use a guarantor otherwise lenders may not be willing to provide a loan to you. Loans for people with bad credit are mainly between £100 to £5000 although they can be higher depending on the circumstances.
At First Quality Finance, we help take the issues out of deciding which bad credit lender to choose. We work with a main bad credit lender who we believe offers a premium bad credit lending product that will be suitable to you in most circumstances. All you need to do to apply to our lender is complete the form on the top right of this page and hit submit, your application will then be processed by the lender immediately and you will be contacted by one of their friendly staff to complete the process. Upon successful completion and signed agreements, your money will be deposited into your bank account.
Bad credit loans can help you rebuild your credit rating as long as you keep up the repayments.