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Personal Loans for People with Bad Credit

Bad credit is a common problem in the UK. Whether you’ve earned it because you lost your job or because of a default, you’ll have no other choice but to face the consequences. One of the most common consequences of bad credit is the struggle to get approved for a personal loan. Your creditworthiness has been badly hurt by your poor credit rating, which means that you’re now considered a high-risk borrower. Most lenders will likely reject your loan application. Fortunately, there are alternatives specifically offered for borrowers with bad credit. Below are some loan options you can check.

Payday loans

Payday loans are very popular in the UK for its promise of quick cash as well as for the controversies hounding the loan product. Despite experts discouraging borrowers, more people continue to apply for the loan because it’s convenient and easy. But more importantly, borrowers with bad credit can apply for said loan product. You can borrow from £100 to £1,000 or more payable in 28 days or on your next paycheck.

Doorstep loans

Doorstep loans are like payday loans where the borrower is not required to have good credit to be eligible. But unlike payday loans, doorstep loans are even more convenient because the lender goes to you rather than the other way around. You can apply right from the comforts of your home. Loan amounts, however, are limited typically just between £50 and £500.

Guarantor loans

If you need a bigger loan amount, you can always check out guarantor loans. Guarantor loans are also easy to avail but there’s one important requirement you need to be eligible. As its name suggests, you need to find a guarantor with good credit to be able to borrow from £1,000 to £15,000 at interest rates more affordable than other unsecured loans. In a sense, the guarantor is the security to guarantee lenders that they won’t be losing money when they approve your loan.

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Logbook loans

If you need even larger amounts than what a guarantor loan can offer, a logbook loan may be perfect for your financial situation. With logbook loans, you can borrow up to £50,000. Unlike the aforementioned loans, however, you need a security, in this case your vehicle to be eligible for the loan. Even if you have bad credit, so long as you’re willing to use your vehicle as security, you can avail a logbook loan. For the best logbook loan deals, simplelogbookloan has exciting offers you can check out.

 

 

 

 

 

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Tips and Tricks When Borrowing Unsecured Loans

If you’re going to borrow money from a bank, a high street lender or an online provider, thorough planning is crucial no matter the amount you plan to borrow. Debt can be tricky and dangerous not to mention incredibly expensive if you have a bad credit history. If you’re planning to get a personal loan soon, it pays to do your research first. We also have a list of borrowing tips and tricks below to help you along.

Check your credit score

Regardless of the amount you wish to borrow or the type of loan you’re applying for, knowing where your credit score stands is essential. With a clear knowledge of your credit rating, you’ll be able to know which types of loans are available and suitable for your financial situation. That eliminates unnecessary loan applications. You’ll also know what to expect when it comes to your loan’s cost.

Know how much you need

Another important tip you should first thing before applying for a loan is to know how much you need. A rough estimate or a reasonable loan amount range will help you stick with the plan when it’s time to compare loan deals. By keeping this step in mind, you reduce the temptation of borrowing more than what you need and you can afford. While you’re at it, you’d also want to plan how you’re going to spend the money as soon as you receive the cash. If it’s for a medical expense then make sure it goes to where the money is intended.

Examine your budget

Another important consideration when applying for an unsecured loan is to examine your budget. Regardless of the amount, you are required by law and the loan terms to repay said loan as agreed upon. You can’t go on borrowing money you cannot afford to repay. You’ll know how much you can set aside for loan repayments by carefully working out your budget beforehand.

Take time to shop around

There are plenty of loan offers available in the market. Whether you’re borrowing from a bank or online, the choices are vast and diverse, which is why you need to shop around before you sign up for a loan. It works just like with any of your major purchases. Canvass the market, compare similar options and continue shopping around until you find a suitable loan deal that meets both your needs and budget.

Understand the loan’s cost

To lure borrowers, providers often advertise their loan offers as best and cheapest in the market. Don’t be fooled with too good to be true offers. Just because the lender said their loan deal has the lowest rep APR doesn’t mean it’s true. You need to understand your loan’s cost as thoroughly as possible for a clearer picture. That means you’ll have to do your own research to get it right.

Ask questions

Before you sign a loan deal, make sure you ask all the questions you needed to ask. From the repayment terms to the interest rate, hidden fees and more, these are loan-related factors you need to clearly understand if you want the best end of the deal. Call customer service to ask questions and seek for expert advice. You can also ready online reviews and seek recommendations from people you know for added info.

Read the fine print

Even after calling customer service, you may still want to take your time reading the fine print. On the fine print is where you’ll find more information and details that were not disclosed by your lender. Rather than be sorry later, it’s best to read the fine print before signing any credit agreement.

 

 

 


 

Unsecured-Loan

Are Unsecured Loans Better than Secured Loans?

Whether you have good credit or bad credit, there are plenty of personal loans available at your disposal. You can borrow as little as £100 for an overdue bill or as much as £50,000 or more for a major expense. Either way, the trick when borrowing money is to thoroughly plan especially the repayment part of the loan. Understanding how loans fall into two main categories, which are secured and unsecured loans, will also help. To help you along, here’s a quick guide and comparison of secured and unsecured loans.

What are secured loans?

Secured loans are the type of loans secured against an asset or property. To avail the loan, you’ll need collateral to get approved. Collateral or security may come in different forms. Among the most common examples as required by your provider and the financial product you’re applying for include a home, a vehicle or items such as stocks, bank accounts and more.

With secured loans, lenders are essentially taking little risks hence the more generous loan offers. Depending on the value of your collateral, you can borrow between £1,000 up to £50,000 for logbook loans and up to £100,000 or more for home equity or mortgage loans. It follows that repayment terms are also longer. But more importantly, secured loans come with cheaper interest rates all in all because of the security involved. On the downside, there’s always the possibility of losing your collateral to your lender in case you are unable to repay the loan.

Secured loans are ideal for borrowers with an asset or property they can use for collateral who need a larger loan amount than what unsecured loans can offer.

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What are unsecured loans?

Unsecured loans are exactly the opposite of secured loans. There’s no security involved, which means that the personal loan is not secured on any asset, personal property or collateral. Unsecured loans are also generally easier to avail than secured loans because the requirements are simple and basic. Even people with bad credit can avail unsecured loans. If you really need quick, there’s no more convenient type of loans available than unsecured loans. Popular examples in the UK include payday loans, guarantor loans, doorstep loans and more.

On the downside, unsecured loan providers aren’t able to offer borrowers larger loan amounts. Because the risks are higher especially on the lender’s part, loan offers are limited between £100 and £25,000. To offset the risks, lenders usually spike the loan’s cost with higher interest rates, hidden fees and other associated loan charges. If you have bad credit, prepare for a steeper interest rates than borrowers with a good credit score.

While there’s no repossession to worry about when you’re opting for an unsecured loan, these loans are only ideal if you need quick and a small amount of cash. It’s great for financial emergencies but not for major investments, business expansion and related needs.

Which is better for you?

Between unsecured and secured loans, one can’t really say that one is better than the other. Taking into consideration that each borrower have diverse and different financial needs, you’ll only know which type of loan is better based on what you need and what your financial situation demands. If you’re a homeowner with good credit, for example, you can avail a secured loan using your home as collateral. This will allow you to borrow more money at a more affordable rate. Conversely, if you don’t have a property to use for collateral and you have a poor credit score then it’s wiser and more feasible to stick with unsecured loans.

6 Types of Unsecured Loans Available in the UK

When you have a poor credit score and you need a personal loan, expect to get rejected or refused especially by major banks and high street lenders in the UK. Because of your history of CCJ or default, lenders are likely to entertain you considering the high-risk financial position you’re putting them in. Thankfully, there are loans suitable for people with bad credit.

Unsecured loans, which do not require any collateral or security of any kind, are convenient loans people with bad credit can easily avail. Not only are the requirements minimal but your credit score is rarely a factor when it comes to your loan approval. So long as you have a steady source of income and you live in the UK, you can easily avail the following types of unsecured loans:

Payday loans

Payday loans are arguably the most popular unsecured loans available in the UK. It’s popular across the UK not only because it promises quick cash but also because of the controversies surrounding the financial product. Like its name suggests, payday loans are loans offered for fully employed borrowers who can’t avail a loan elsewhere because of bad credit. But while convenient, payday loans can be very costly. You can borrow between £100 up to £1,000 payable on your next paycheck. The downside is its high representative APR of 1,000% or more.

Guarantor loans

Like payday loans, guarantor loans are suitable for people with bad credit because it does not require any credit checks. Instead, what you’ll need as borrower is a guarantor with good credit to co-sign the loan agreement with you. Even if you have a poor credit rating, you can still avail the loan and borrow larger amounts typically from £1,000 up to £15,000 depending on your provider. Approval is also expedited for guarantor loans because there’s little to no risks involved on your lender’s part.

Credit union

If you’re a credit union member might as well take advantage of said membership by applying for a personal loan. As a member, you’ve been paying deposit money to the credit union, which entitles you to an emergency loan. The process is fast and the best part is the lower interest rates as opposed to what a payday loan may cost you. Loan amounts are not very generous but it also ranges from £500 to a couple thousands of sterling pounds. It’s ideal for a wide range of financial emergencies.

Peer to peer loans

Another type of loan that does not require any collateral is peer-to-peer loans. Rather than borrow from a bank, this type of loan system lets you borrow directly from the lender. That means no middleman hence lower interest rates. Lenders, however, may require you to have good credit. But there are also some lenders who lend money to people with bad credit. You just need to prove that you’re financially able to repay the loan as agreed upon.

Doorstep loans

If you’re looking for quick cash and convenience, you might consider getting a doorstep loan. Rather than go to the lender, providers of doorstep loans go directly to the borrowers. There’s no need to leave the comforts of home to avail this type of loan. You can apply from home, receive the cash and repay the loan through a debt collector.

Credit cards

Credit cards are another type of unsecured loans that offers you quick and convenient cash. You can use it for cash advance, for instance. Just remember that credit cards come with steep interest rates. If you’re going to use it meet a financial emergency, be sure to have a repayment plan ready.