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Which payday loan is best for people with bad credit?

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The Important Parts

Representative Example:
305.9% APR. £400 borrowed for 90 days.
Total amount repayable is £561.92 in 3 monthly instalments of £187.31.
Interest charged is £161.92, interest rate 161.9% (variable)

Note: Loanago is NOT a lender – we are a licensed broker working with the most popular direct lenders in the market to find you the most suitable short-term loan plan. Our FREE quoting service compares more than 40 lenders quickly and finds you a lender with the lowest rate that they are willing to lend to you today.

Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk

Loans subject to status. Over 18s only. Minimum loan amount may apply.

Rates from 4.5% APRC to 500% APRC are available – the highest rate is for customers with severe credit problems. Loans available from 1-25 years. TYPICAL 10.9% APRC variable

Lenders Facts

Loan amount
£50 - £2,000
Loan term
3 Months Only
CUSTOMERSCORES
Good
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Loan amount
£200 - £1,000
Loan term
3 - 6 Months
CUSTOMERSCORES
Excellent
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Guaranteed Loan

A guaranteed loan is secured against a property or by a person to make sure the loan is paid back in full. This is something that you can find in the market where an applicant has a low credit rating. It is quite common for loans to be required a guarantee if the applicant is someone with poor credit history.

Guaranteeing a loan is a way for people who desperately need financial assistance to acquire funds without putting risk on the lender. This type of credit is usually made if the borrower is an unattractive applicant for a loan such as those with thin credit history.

Guarantees are common in the student loan industry as well as in start-up businesses. The federal government guarantees loans to people who are generally young and have not yet build a solid credit history. This guarantee encourages banks to lend to students and start-up businesses and ensures that the banks will be paid back.

A guaranteed loan with a Guarantor

The person assuming the responsibility to guarantee a loan is called the guarantor. The guarantor co-signs the loan as a pledge to assume the financial obligation of the borrower in case the borrower defaults on the loan. Having someone to guarantee your loan increases your chances of the loan being confirmed, and you can expect your loan application will be approved without any hassle.

Although this loan still involves risk, guarantees provide an extra layer of security. However, guaranteed loans are not perfectly safe because it is still possible that even the guarantor can default on the loan if the liability is too large or if the guarantor is already struggling for other reasons.

All guaranteed loans must be discussed clearly. It is important that the guarantor guaranteeing the loan fully understands the nature of the loan and its liabilities. Details about the loan must be disclosed to the guarantor. These include the terms, history, and events that would involve the guarantor, the maximum potential liability under the guarantee, and any provisions under the guarantee.

why choose guaranteed loan

Guaranteed Loan for Bad Credit

A credit score represents the level of financial trust of a person, which is calculated by special credit reference agencies. People with a high credit score have showed that they pay their financial obligations on time and never miss a payment. On the other hand, a person with poor credit score had some financial issues such as late payments of bills or debts. This person is considered a more risky person in terms of financial obligations.

People with credit problems are those who suffer the most when it comes to getting credit during a financial emergency because they are less likely to be approved. Although not impossible, it is usually difficult for people with bad credit rating to find a lender who is willing to offer a loan. Good thing there is a  guaranteed loan available.

Other lenders that merely reject loan applications because of the adverse credit record. Others charge extremely high interest and fees for offering you money. However, you’ll also find bad credit lenders that would accept guarantees. These lenders will look into your employment status and ability to pay.

For each application, creditors may use your credit rating as one of the criteria. However, nobody knows how lenders interpret these numbers. It is entirely up to the lender to decide how bad or poor a score is.

Aside from the credit score, lenders may take into account many other factors such as your income and employment history. While one lender can deny a person with poor credit, another may accept the same person. There are just different lenders accepting different levels of risk, and thereby approving people for loans with different credit scores.

Guaranteed Loan in the UK

Guaranteed loans are common in the United Kingdom. These types of loans are designed to provide financial assistance to people with poor or bad credit history. The options range from all sorts of loans that use a form of security or guarantee to the loan such as property, paycheck, vehicle, a person with good credit rating, and other valuable assets like jewellery and bonds.

A guaranteed loan is quite popular as they allow borrowers to take out the loan amount they need and get a lower interest rate, even with bad credit. This is because a guarantee or collateral lowers the risk on the part of the lender. These loans can be small and short-term or large sum of money over a longer period, depending upon the guarantee or collateral.

Guaranteed payday loans and instant guaranteed loans online are typically small and short-term. You can borrow £100 to £2000 with a loan term of one to six months. Guaranteed secured loans such as those secured against a house or vehicle or any valuable asset are usually large borrowings over one to five years.

Key Points of Guaranteed Loan

A Guaranteed loan is a perfect solution when your credit rating is low or when you have no credit at all, and you need a certain amount of money with a lower interest rate. A guarantee secures a loan, which therefore mitigates risks on the part of the lender. A guaranteed loan is not really a unique, stand-alone type of loan, but it is an option offered by most lenders.

A guaranteed loan has both advantages and disadvantages, so better make sure that you can afford the repayments. Make sure that this is the loan for you before you apply for it. Choose your lender wisely and be sure to make enough research about your lender.

The goal of a guaranteed loan is to help people meet their financial needs, regardless of their credit history. Guarantees help make home ownership affordable to lower income households and first-time buyers, students to finish college, and investors to put up business. No matter the creditworthiness is of an individual or company, a guaranteed loan is a huge help and financial support for those in need.

Take time to understand the type of loan you intend to apply for, and learn more about the lender you’ll be working with.

why choose guaranteed loan

 

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5 most recent personal loan reviews

Review of Funding Circle

Very quick response and good safety features. Speak to real people once the application has been logged. Very simple to fill out. Would definitely recommend Funding Circle to anyone.

Review posted by Gary Craigs, Dumfries

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money

Review of Savvy

Really Great Service! Thoroughly recommend! Have dealt with several loan companies & Savvy is definitely the best, easiest, professional & they do exactly what they say unlike many other financial companies that lead you up the garden path!

Review posted by Helen Stern, Sheffield

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money

Review of Capital One

I have poor credit and really needed the money to pay a court fine or be up against the magistrate again. Really helped me out and I found the charges for the credit very reasonable. Would highly recommend if your in a pinch. Great customer service and went out of their way to help get the loan out the same night I applied. Started 6pm and had money in the bank before 10pm. Great service.

Review posted by Blake Harrington, Margate

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money
All reviews have been sourced from Trust Pilot to ensure the authenticity of accounts.