A low credit score can, unfortunately, mean that you have fewer options to consider when it comes to borrowing money. However, it does not have to stop you from getting credit altogether. When it comes to applying for loans, credit cards or other types of finance, your poor credit rating doesn’t have to stand in your way. You will still be able to apply for finance by opting for a bad credit option – these tend to be loans and/or credit cards designed specifically for those with a poor credit history. Bear in mind that there will usually be a higher interest rate to pay compared to regular personal loans, as lenders take a greater risk providing credit to those who are more likely to default based on their history.
Types of Poor Credit Loans:
There are several different types of poor credit loans and credit cards that you may be able to apply for. These financial products are designed for those with a poor credit history, however, you will need to bear a few key facts in mind. For example, you are less likely to get a large amount of credit until you have been able to prove that you can manage your money responsibly by making repayments on time for a certain period. In addition, you can usually expect to have a higher interest rate.
Guarantor loans involve getting the help of somebody else to borrow money and tend to be a good idea if you have a poor credit rating and want to borrow a larger amount than you would be able to on your own. It involves the borrower arranging for a second person to say that they will take over with loan repayments if the borrower is unable to make them, lowering the risk that the lender takes when providing credit. Providers will have different criteria, but typically the guarantor will need to be over 18 years of age, working full-time, and in some cases, a homeowner.
Unsecured Personal Loans:
If you have poor credit you may be able to get a small, unsecured personal loan from a short term loans direct lender like Bingo Loans. You will not need to put forward a property or other high-value asset to secure the loan; instead, you will be assessed for approval by the lender based on how likely it is that you will be able to comfortably make repayments. You will need to provide an honest account of your incomings and outgoings; if you are unable to make repayments the lender will be able to take legal action against you.
Peer to Peer Loans:
Peer to peer lending provides those with bad credit an option to get a loan without the need to borrow from a bank or building society. Instead, you will be borrowing from either an individual or a group. This works by matching up people who wish to earn a return on their investment with those who need to borrow. There will usually be an age and income restriction in order to qualify. If you’re dealing with bad credit, all hope is not lost – you may still be able to borrow with one of these options.