There are many popular types of bad credit loans in the UK, each designed for different needs and circumstances – loans that are specifically tailored for this growing marketplace and provided by specialist lenders. If you have become a victim of a bad credit history then it can be really hard to find someone prepared to lend you money, especially when it comes to the mainstream, “high street” banks and institutions. So these specifically targeted loans are proving extremely popular – more so now than ever before due to the increasing volume of people who are subject to negative marks on their credit report.
Contrary to popular belief, there are very few bad credit loans with no credit checks and you’ll still need to satisfy certain criteria, especially when it comes to affordability. Interest rates will probably be higher and access to larger loans may be difficult without any form of security but, chances are, if you can justify taking on a loan and can afford the repayments the there will be options out there.
Popular Types Of Bad Credit Loans
As the market for bad credit loans grows so do the number of companies competing for the business – hence the many different types of loans, often packaged up with fancy names, differing features and advertising gimmicks so below we,ve listed the main types and provided a little information to help you understand what they are and how they work a little more.
Instant Bad Credit Loans
If you are looking for instant cash then there are companies that specialise in arranging short term loans for UK citizens – including those with a less than perfect credit history – FAST. These types of loans are usually designed for short term requirements and in small sums (typically £100 to £500 or so) only. Repayment is normally required in full and after a period of just a few weeks. So if you need fast access to cash for paying anything from electricity bill, groceries or car repairs or anything else, then an instant loan is an option.
If you have bad credit like IVA, arrears, CCJs, defaults, late payments, missed payments or a low credit score then, to many lenders, this doesn’t matter as you can still apply – check out the eligibility criteria of the lender BEFORE applying to make sure your application will be considered. Because speed is the main focus here, application is usually online and electronic, a decision is instant and, if accepted, funds will be transferred immediately … it’s THAT quick!
Payday Loans For Bad Credit
These type of loans are often very similar, if not the same, as the instant loans explained above. They are very heavily advertised and growing more and more in popularity! Simple online application and you don’t have to wait days for approval, instead you should get an answer within just a few minutes. To qualify for a bad credit payday loan, you should be a resident in the UK, be employed or have a regular source of income and be over 18 with a bank account. If you meet these requirements, you could receive instant approval.
As the name suggests, these are short term loans designed to bridge a gap until the next time your ‘re paid at which time you’ll be required to repay the loan in full. Again, we’re talking small loans for the short term but your money should be transferred to your account fast – no later than the next business day and often on the same day, after which you’ll usually have a month or so to repay it. Be careful as interest rates can be high, especially if there is a bad credit history involved!
With a doorstep loan then you could have up to £1000 delivered to your door in a few days – regardless of your credit history. Doorstep loans (also known as home credit) are specifically designed for the bad credit market, are incredibly flexible and can provide a solution for any financial issue. These any purpose cash loans are available to anyone who can afford the repayments moving forward, regardless of what may have gone on in the past – homeowners, tenants, those working full time, part time, unemployed, students, retired or on benefits, good credit or bad … all eligible to apply.
These are another popular type of bad credit loans and usually take around 48 hours from start to finish. There is a simple application process, initially online after which an agent will call at your home to discuss your application face to face, agree terms and deliver the loan. This same agent will then call each week to collect the repayments … hence the name doorstep loans! There are no hidden charges or fees, interest rates are high but repayments are split into small manageable and very affordable, weekly repayments – it’s tailored to your particular needs so that you can afford the weekly repayments that you agree to.
A bad credit instalment loan provides access to slightly larger loans with regular repayments split into monthly instalments that can be spread over a year or so. Applying for an instalment loan only takes a few minutes to complete and is online. A slightly larger loan, the ability to repay in instalments added to a bad credit rating equals increased risk to the lender and so they will be more careful who they lend to and so a decision may not be instant.
All you have to do is to provide your details online and you should find out within a few hours if you have been approved for this loan. You should then receive the money into your account within a few days (sometimes it can be faster – check lenders terms). You will have to be over 18 years of age and a UK resident and take home a minimum of around £750.00 per month before you’re able to apply for these popular types of bad credit loans though and make sure that the lender does accept applications from those with a bad credit rating.
Logbook Loans For Bad Credit
Logbook loans are quite popular if you need to raise capital and don’t mind using your vehicle as security. As this is a loan targeted at the bad credit market the interest payable is higher than it is for other forms of credit and should only be considered for the short term. However, because you are required to sign over your car or vehicle as security on the loan there are often no credit checks required and the cash can be delivered within just 24 hours.
As the name suggests, a logbook loan is secured on your vehicle and the lender will keep hold of the V5 registration document (the logbook), whilst you repay the loan. If you should default on any repayments then the lender is able to legally take over the ownership of your vehicle and sell it to recover monies owing so be very careful. Logbook loans are for varying amounts up to a maximum of £50,000 depending on what your car is worth at present. You can usually pay the loan back over one month to three years.
Unsecured Loans For Bad Credit
Taking out an unsecured loan means that it is not secured against your property and therefore is available to homeowners and tenants alike. These are more traditional loans that are also known as personal loans or signature loans, that are approved on the back of a promise to repay. These popular types of bad credit loans may not be as easy to obtain as some of the other loans due to the increased risk to lenders who will be more selective as to who they lend to because of this increased risk. However there are an increasing number of unsecured loans providers who specifically target the bad credit market and are prepared to take on an increased risk … but usually at a cost!
Typically these unsecured bad credit loans will be advertised up to around £15,000 maximum loan and repayment terms of up to 5 years. Whilst bad credit will be accepted the lender will want to be convinced as to affordability moving forward.