Which payday loan is best for people with bad credit?
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The Important Parts
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)
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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
Representative APR 278%
Representative example: £500 borrowed for 90 days. Total amount repayable is £672.60. Interest charged is £172.60, interest rate 140.0% (variable).
Representative Example: If you borrow £400 over 6 months - payment 1: £162.66, Payment 2: £, Payment 3: £, Payment 4: £, Payment 5: £, Payment 6: £, Rate of interest 0.80% per day. Total repayable £736.00. Interest Rate 292% per annum (fixed). Representative 1,256.5% APR.
Poor Credit Loans
If you’re struggling with your finances and have a poor credit, you’re not alone. It is quite common among people around the world, and this is why loans are created. Poor Credit Loans can help you get through tough times specifically when it comes to your finances.
Having poor credit is not something new either. There is an abundance of lenders offering poor credit loans, so you don’t have to fret. However, you need to understand the ins and outs of poor credit loans before taking out one.
What are poor credit loans?
Poor credit means you have a score just below the good credit rating, but references may vary. Poor credit is somewhere between the good credit and the bad credit scores. A poor credit score typically ranges from 500 to 579. Scores ranging from 300 to 499 are already considered bad credit.
It is often difficult to get a loan approved with a poor credit score because lenders consider them as risky borrowers. However, looking for lenders that will offer you a loan if you have a poor credit rating isn’t that bad because you have many options. You may have defaulted on a loan or missed credit card payments in the past, but it doesn’t mean you are forever banned to be eligible for poor credit loans.
Good thing about these poor credit loans lenders is that they will only conduct a soft credit inquiry when you apply for them to find out what rates they can offer you. Apply to as many lenders as possible that use a soft pull. Then, compare the rates. A soft inquiry enables you see the details of the poor credit loans without formally applying, which means your credit score will not be affected, so you don’t have to worry about damaging it further.
If you are offered poor credit loans, expect that the interest rate, fees, and charges are higher than those loans for people with good credit, and there’s also a possibility you’ll get declined. The high interest rate on poor credit loans is the lender’s way of compensating for the risk of lending you money.
What are the options for poor credit loans?
Unsecured Personal Loans
You may choose to take out unsecured personal loans if you have a poor credit. You can get the money you need without having to use your home or any asset as security for the loan. Although these loans have sky-high interest rates, they are than nothing for those with poor credit.
Secured Personal Loans
In contrast, if you want to get a lower interest rate, you may take out a secured loan. You use your personal asset as collateral for the loan, so you can get a larger and possibly lower percentage cost than if it were unsecured.
Those who have a poor credit, but are non-homeowners can opt for a logbook loan. This type of loan is secured against any vehicle such as your car, van, or motorcycle. However, you must be aware of the consequences of secured loans in the instance that you can no longer make the repayments.
If you are looking for small, short-term funds, payday loans have always been a quick way for those with poor credit to get cash. Perhaps you just need £200 or £300 to cover expenses until your next paycheck, payday loans are very helpful. You even borrow up to £1,000 for over thirty days. This type of loan can help people who have a poor credit in times of unexpected financial emergencies.
If you have a poor credit history, doorstep loans, also called home credit, are also a helpful option. You can borrow up to £2,500, depending on the lender, and it is subject to affordability. With service to your door, people with poor credit often use this type of loan for emergency expenses such medical bills or your car needs some immediate fixing.
Peer-to-peer or P2P loans are also a good alternative for poor credit. P2P lenders let you borrow money from investors rather than a bank or building society. It works like a bank, only that the interest rate for the investors are higher. The interest rate will be higher than that of banks, but it is a viable option for those with poor credit. Peer to peer lending can offer better deals than some traditional loans.
Another alternative that you can also try is the credit union loan, which are offered by community-run co-operatives. Credit unions are also good sources of financial services for people with poor credit.
Loans from credit unions are also much easier to get than from a bank because the credit standards of credit unions are often more lenient. Since they are not-for-profit entities, they can offer loans and other financial services much more cheaply than profit-driven banks. However, you first need to be a member of the credit union for you to qualify for a loan.
Instant Loans Online
Instant loans online are also a viable alternative for you. Their same-day processing can provide you with the money you need quickly. Many people who use these short-term loans can appreciate these alternatives when there are no other options available. For those who have poor credit, it comes as a relief to get an instant loan.
If you have a poor credit score, you can also get a guarantor to help you obtain the funds you need. With this type of loan, you need another person with good credit and stable income to agree to cover the loan payments if you can’t pay them. With a guarantor, you can be offered a lower interest rate.
Loans with a guarantor are very popular as well because you could borrow between £100 and £15,000 with a close friend or family member guaranteeing your loan repayments. A guarantor loan is much cheaper and more flexible than some other forms of poor credit borrowing.
Getting poor credit loans are opportunity for those with poor credit to repair their credit rating. If repayments are done promptly for the loan, it would show that the borrower is reliable.
All loans come with certain risks. You should always make sure that you could afford the repayments before you take out any loan. If you don’t make the repayments as agreed, you could end up heavily in debt and ruin your credit rating even more.
If you do choose to get poor credit loans, compare all your options carefully to keep your cost down. Make sure you can manage the monthly repayments without compromising your other monthly expenses.
Regardless of what you might need the money for, you’ll always be able to access the best deals when you have a good credit rating. Shop around for the loan that will best suit your personal needs, and work on improving your credit score so that you’ll have better options available to you in the future.
With Bad Credit
5 most recent personal loan reviews
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
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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
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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
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