These days there are so many different bad credit loans and so many fancy names that getting a loan can be a confusing and daunting task – loans for bad credit, loans for poor credit, unsecured loans, secured loans, payday loans, doorstep loans, installment loans, instant loans, guaranteed loans … the list goes on and on.
Below you’ll find a list of loan types and simple explanations that we hope may help.
The Different Types Of Loans That Are Available With Bad Credit:
Adjustable Rate Loans: Loans where the interest rate is based on your outstanding balance each month, hence your monthly payment will be different each month depending on the amount left outstanding.
Adverse Credit Loans: Adverse Credit is having a poor credit rating because of historical financial issues such as arrears, defaults, CCJ’s. Adverse credit loans are specifically designed for such situations. Interest rates will generally be higher due to increased risk to lender.
Bad Credit Loans: Loans with higher interest rates but specifically designed for people with a bad credit history – arrears, defaults, CCJs etc.
Bridging Loans: Short-term loans to help you buy a new property before you’ve sold your existing one or before your mortgage or loan has been finalised – a temporary loan to bridge the gap.
Car Loans: A Car Loan is a loan to help you borrow the money you need to buy a car – usually secured against the value of the car. Bad credit car loans will usually command a higher interest rate due to increased risk to the lender.
Cash Loan: A general term for an unsecured personal loan and often associated with small loans that can be provided fast.
Crisis Loans: Loans that are specifically designed to help those in the case of an emergency or catastrophe. Crisis loans can be financed from charity or social funds and are often interest free meaning that only the loan amount has to be repaid.
Debt Consolidation Loans: Debt consolidation loans combine all your outstanding debts into one loan in order to give you a single more manageable monthly repayment.
Doorstep Loans: Cash loans delivered to your door and repayments collected regularly by a local agent.
E Loans: An Electronic loan – online application and processing – the entire application process handled without the need for face to face application.
Fixed Rate Loans: – Loans where the interest rate does not change throughout the loan repayment period.
Flexible Loan: A Flexible Loan is when you have flexibility in the amount of your monthly payment. You can overpay one month and underpay the next as your finances allows.
Guaranteed Loan: A promise to pay the debt should the borrower fail to keep up repayments.
Guarantor: A person who agrees to guarantee the debts of someone else, often a close friend or family member. If the borrower fails to make payments then the guarantor will be obliged to make them.
Home Collected Credit: Small cash loans delivered to your home and repayments collected in the same way.
Home Equity Loan: Loan taken by homeowner in lieu of equity in the home. Equity being the difference in value of the property to the amount owing on it.
Home Improvement Loan: A loan used to pay for improvements to ones property.
Instant Loans: Often small loans that can be transferred into your bank account within minutes, hours or same day.
Interest Only Loan: A loan in which you pay only the interest each month – usually only for a set period of time.
Loan: A Loan is an amount of money that you borrow with a fixed term and agreed rate of interest in which you repay the money in regular payments.
Logbook Loan: Loan secured on your logbook and against the value of your car or vehicle.
Mortgage: The money you borrow to buy a home or property.
Payday Loan: Short term loan designed to be repaid in full on your next payday – a loan designed as a salary advance.
Personal Loan: A loan for personal use which can be secured or unsecured but can be used for any purpose. A personal loan for bad credit may be at a higher interest rate to reflect the increase in credit risk to the lender.
Poor Credit Loans: Loans with higher interest rates than prime loans which are usually offered to borrowers with poor credit rating due to historical financial issues such as arrears, defaults, CCJ’s.
Pre-Approved Loans: Getting the approval for a loan or mortgage in advance and before you start looking for a home.
Refinance: Repayment of an existing mortgage loans by getting a new mortgage loan.
Re-mortgage: Additional loan to a mortgage that already exists on a property enabling increased borrowing against equity.
Secured Loan: This loan is secured against your property by the lender thus minimising the risk of lending and hence being able to offer the loan at a lower interest rate to a loan that is not secured. A bad credit secured loan may be at a much improved interest rate to an unsecured loan due to the reduced lender risk.
Student Loan: A loan that enables students to get the money they need to pay for tuition and college/university expenses.
Sub Prime Loans: Loans with higher interest rates than prime loans which are usually offered to borrowers with adverse, poor or bad credit ratings or history.
Tenant Loan: An unsecured loan lent without the need for any form of security or guarantee and is hence available to homeowners and tenants alike. The lender relies on your promise to pay it back only hence interest rates are often higher than a secured loan.
Travel Loans: Loans designed to finance travel or holidays, also known as holiday loans.
Unsecured Loan: A personal loan lent without the need for any form of security or guarantee and is hence available to homeowners and tenants alike. The lender relies on your promise to pay it back only hence interest rates are often higher than a secured loan and rate on bad credit unsecured loans can be very high.
Vehicle Loan: A Vehicle Loan is a loan to help you borrow the money you need to buy any vehicle (bike, car, van commercial vehicle) – usually secured against the value of the vehicle itself.
Drop by again soon – we’ll be adding more loans and information over the coming months.