Most people in the will borrow money at some point in their lives. There are a variety of reasons why people take out loans. Before you apply for a loan make sure you complete an assessment of your personal finances. Taking out a loan is a serious financial obligation and is a decision that should not be taken lightly. You need to make sure you will be able to make the repayments, plus the interest, because you do not want to risk ending up in a debt situation. It is worthwhile taking the time to compare different types of loans to find the best one available and the right loan for you and your lending needs.
The number of people with a bad credit rating is rising every day. However, there can be many different situations in which a loan is the only possible solution. Usually it is very important to have a good credit rating to get a loan. There are still some loans available for people with a bad credit rating, but they will never offer you as good rates as for a normal personal loan.
Some lenders have specialised on loans for people with a bad credit rating. The average range of available amount is between £50 and £100,000.
The higher amounts are usually secured loans, which mean that the lender requires an asset as collateral for the loan. If you fail paying back the money on time, the lender is authorized to take this asset, which is normally a house or a car, to cover the debts. Remember that this means for you that you can lose your house!
However, there are still some unsecured loans available. The most common one is the payday loan. Their interest rates tend to be very high, so this should always be an emergency solution.
For most of the bad credit loans you have to fill in a form online. Before you decide for one lender, it is useful to shop around until you find the cheapest offer. Never go for the first offer you find.
If you need a loan and you own a vehicle you can consider a logbook loan. Logbook loans are essentially secured loans. With secured loans you are required to put up an asset which is essentially ‘secured’ against the loan. In this case your vehicle is used as collateral and so the loan is secured against the value of your car. A secured loan gives the lender greater security over the money that they lend which can mean lower interest rates. Logbook loans are becoming increasingly popular as they can be very fast and are easy to apply for. They are also suited to those with bad credit as they do not typically require a credit check so you can get one whatever your financial past.
As logbook loans are secured loans, if you fail to repay what you owe then you risk having your car seized. Generally speaking, the lender will keep hold of your vehicle documents, such as the logbook, throughout the course of the loan. You will find that the exact amount that you can borrow will depend on the value of the car and the requirements of the lender you choose. When looking for a loan, watch out for any fees because you can be charged to things like paying off your loan early and missing payments. You should only choose a lender that allows you to keep hold of your car for the duration of the loan.
A guarantor loan is an option to consider for those who need a loan but have never had credit or have a bad credit history and have been refused elsewhere. Guarantor loans are where someone else will be guaranteeing to the lenders that the loan will be repaid which is why it is called a guarantor loan. The lender is therefore, able to protect their exposure by allowing a guarantor to co-sign the agreement so that if you fail to repay what you owe the lender will be able to pursue your guarantor for payment. It gives them a way of mitigating their potential losses and allows them to lend money through guarantor loans to those who normally wouldn’t qualify for such services. You will find that usually a guarantor needs to be a homeowner, aged 18-70 and can afford to repay the loan if you can’t. Most people use a friend or family member.
This type of loan should only be used by customers who can find someone who is a secure and responsible individual because the guarantor for the loan is ultimately responsible for the payments should you default on the payments. You will find that interest rates are higher than on standard secured and unsecured loans.
If you have unexpected expenses that you cannot afford and you need money urgently you may want to consider a payday loan. It could be that you have a bill that you need to pay before your electricity or heating gets turned off, or you need to pay for emergency car or home repairs or you need some extra cash just to get by. A payday loan is an unsecured short term loan also known as a cash advance. They way they work are that you borrow some money that you repay plus interest when your next pay cheque comes through. Payday loans are very fast and are easy to apply for. Most lenders can get the money to you the sameday you apply and some can even do it in under sixty minutes.
Payday loans are not suitable for those who are suffering long term financial difficulties. Bear in mind that even though a payday loan can temporarily solve your problem some people will struggle to repay the loan plus the interest. Payday loans can be extended but if you roll them over too many times, you could end up paying a considerable amount of money because of the high interest rates. Interest rates on payday loans are extremely high because you can get one whatever your credit rating.
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If you have a bad credit history obtaining a loan through conventional lenders can be extremely difficult and frustrating because lenders see you as more of a risk, a risk in the current economic climate, they are unwilling to take. If you have bad, little or no credit and you need a loan but have been refused elsewhere you may want to consider a bad credit loan. Lenders of bad credit loans specialise in offering loans for people with bad credit. Not only can you get approved whatever your financial history but you can borrow more money for more time than with a payday loan. If you are looking for a way to rebuild your credit history then many bad credit loans come with credit rebuilding facilities that can improve your rating which will result in improved rates and loan conditions over time if you make your payments on time.
As lenders see you of more of a risk unfortunately you will find that bad credit loans come with high interest rates which can put people off. If you decide on a secured bad credit loan, where you have to put up an asset, used as collateral against the loan, then if you fail to make repayments you risk having this asset seized. However, as the lender does have the security of your asset, usually your home or car, this should help keep interest rates lower.
One debt solution that you might want to consider, particularly if you have multiple debts with multiple creditors, is a consolidation loan. The way consolidation loans work is that you take out a loan and use the money to repay all your existing debts leaving you with just a single and more affordable monthly payment. Your monthly payment should work out lower than your existing debt combined. Also if the loan repayment is spread over a longer period monthly repayments can be lowered even further however, be prepared to potentially pay more interest.
Before you consider a consolidation loan bear in mind that while these loans can make paying back your debt a lot more manageable they will not reduce what you owe. Some people may also feel it unwise to take out another loan on top of what they already owe because this increases the risk of further debt. Make sure a consolidation loan is the right debt solution for you. If you are looking for an alternative solution to solving your debt issues you may want to consider a debt management plan.
Whether your business is just getting starting or you are looking to expand you might want to consider taking out a business loan. There are a wide range of business loans than can suit any size or type of business. Business loans are they can help you realize your aspirations for your company. You can get secured or unsecured business loans but the right loan for you will depend on your corporate requirements.
Business loans can have many flexible aspects so take your time and compare the different loan offers. Before selecting your loan provider it is worth assessing how much you can afford to borrow and what you need the money for.
Claiming back money from your bank is a great way recoup needed funds.