Bad Credit Loans
Bad credit loans are loans which you can borrow from a bank or a lender even if you have a poor credit score. This is a short-term loan which you have to repay with a higher interest rate.
What Is a Bad Credit?
When you have a bad credit it means that your credit history is weak and you are seen as someone who cannot repay the loan in time. The lenders find it risky to provide you with a loan as you have a history of defaulting on a loan.
A Credit report consists of your past transactions with the bank and the lenders, how have you managed your debts, etc. Depending on your transactions with the bank and account, you are given a credit score. It may be a good or a bad score.
Reasons you may have a bad credit score
- If you have missed any repayments in the past
- You have defaulted on your previous debts
- Your identity has been used for fraud
- You had any CCJs
- Bankruptcy or debts
If you want to check your credit score there are a lot of credit agencies like Experian and Equifax, who help you to know your credit score and where you stand in terms of credit rating.
Having a bad credit score could make it difficult for you to borrow a loan. So your first step should be to improve your credit score. However, improving your credit score is a long process and the need for money does not always come when you are financially stable.
So in situations like this, you should consider going for bad credit loans.
What Are Bad Credit Loans?
Bad Credit Loans are a short-term loan which you can borrow for a few months. This is a type of small loan which you can borrow for an amount of £50 to £3,000. You can borrow these loans for a term of 1, 3, 6, 9 or 12 months. You should choose a plan which you can afford to repay in time.
A bad credit loan can be used for any unexpected event like a car repair or any bills that are past their due dates. The money required for such situations is small so going for a small loan makes more sense than going for other forms of long-term loan.
Who Can Apply for Bad Credit Loans?
People with any credit score, good or bad, can apply for bad credit loans. Also, there are many lenders who suggest you to have a guarantor for your loan if you want to borrow. A guarantor is someone who makes payments on your behalf if you default on your loan, this form of a loan is called as guarantor loans. But when it comes to bad credit loans, you borrow without a guarantor as well. These loans are known as No guarantor loans.
Besides this, you need to fit in the below criteria to get a bad credit loan.
- 18 years and above
- A UK resident for more than 6 months
- An active bank account in the UK
- Must have a source of income
Pros and Cons of Bad Credit Loans
- Easy to apply loans
- You can borrow money if you have a bad credit or no credit history at all
- You can borrow a loan for an amount as small as £50
- After submitting the application form the loan amount gets credited into your account within an hour
- Repayment period is short than other loans. Make sure that you can afford the loan and its repayment before borrowing
- Bad credit loans have a higher APR compared to other loans