June 27, 2023
Have you been refused a loan due to a poor credit score? Well, it should not come as a shock to you as a responsible lender will run affordability checks and peering at your credit report is a part of it.
Although some lenders do not fight shy of giving the green light to your loan application despite a less-than-perfect credit file, it does not mean that your will certainly get the nod for a loan. Do up your credit score and stay abreast of the lending criteria from different lenders so you choose the one who accepts you as a potential borrower.
Bad credit loans are aimed at those who need an immediate injection of cash. These loans particularly help fund small unexpected expenses. For instance, when your laptop need a repair or your boiler is acting up, these loans can come in handy.
Quick loans for people with a poor credit score
Emergency cushion serves during these unexpected situations. Unfortunately, many of you struggle to have enough cash to last a month, with money to spare for emergencies. In such a situation, you will certainly rush to a lender to fund your needs.
1. Text loans
Text loans are the fastest loans. They imply that you can get a loan by simply sending a text message to your lender. However, you must be already registered with your lender to apply for these loans.
These loans are probably considered the best when you are stuck in an embarrassing and awkward situation like you wallet has been snitched and you realise it at the time of checking out.
As all details your lender has already saved on their server, they can quickly access your information and make a decision. However, it is worth noting that most of the lenders provide text loans with no credit check. Beware of them as they can be harmful to your finances.
If you are looking for a text loan from a direct lender, make sure that they run a credit check. Every lender is to abide by the law regardless of what type of loan they are offering. If it is been a long time since you applied for a loan last time from the lender, you will have to provide the latest financial details as well.
Text loans are small loans. Some lenders say they can offer up to £5,000, but that is all a marketing stunt to allure you into applying from them. The money is offered up to £100, or in rare cases, it can be beyond.
You will have a very small period, in most cases up to 7 days, and the whole of the debt will be paid off at once. Superficially it seems every affordable, but it is not. The APR can cost up to 994%.
These loans can be very expensive if you cannot pay it off once and for all. Administrative transaction fees worth £25 will add up. This will quickly rack up the debt, and you will eventually realise that it has eaten up a large portion of your money or you have fallen into an endless cycle of debt.
2. Guaranteed loans
You might understand that guaranteed loans are 100% guaranteed acceptance, but that is not true. The approval rate of these loans is certainly higher than other loans, but a lender will sign you off on only if you can afford to pay back.
Guaranteed loans are generally aimed at people with very poor credit rating. Because your credit history is already bad, hardly a lender will approve your application. Therefore, a few lenders offering these loans will make a decision based on your affordability.
These loans are not subject to large funding, meaning you will be able to borrow up to £1,000. However, if you are a tenant, it can be quite tough for you to get these loans. Well, you do not need to bother as you can apply for guarantor non homeowner loans.
These loans are quite different from guaranteed loans. Whereas the guaranteed loans do not require a guarantee from a third party, you will need to arrange a guarantor to get approval for a guarantor non homeowner loan.
The guarantor must have a good credit history and will promise to clear the debt in case you cannot adhere to payments. If it happens, the credit score of the guarantor will also be harmed. Interest rates will be more competitive when a guarantor signs the agreement with you.
3. High-acceptance payday loans
Arranging a guarantor can be a bit tricky especially if you are a tenant. So, you can consider high-acceptance payday loans for quick funding. These loans require a credit check but some lenders run only soft credit checks to prevent you from further damage due to hard search footprints. The lending decision is generally made after perusing your income records.
These loans are good to fund unexpected expenses that you cannot put off. These loans are very expensive; however, not more than text loans. Once you fail to stick to your payment plan, you will soon be up to your neck in debt.
While text loans are paid back in 7 days, payday loans are paid off in 14 days. Some lenders may be willing to provide payday loans with no credit check. Beware of such profiteering lending companies. They are unauthorised. You will end up with too much debt.
What is the best alternative to these loans?
The aforementioned loans are small unsecured loans typically designed to finance unforeseen expenses. Not just high interest rates make them expensive but a lump sum payment in a very short period also poses a challenge to your financial position.
You can choose to pick an alternative – logbook loans. These loans are entirely different from the aforementioned emergency loans. Logbook loans can also provide you with fast funding and let you borrow a larger sum. You can even use these loans for planned long-term expenses. Make sure the lender has a policy to lend you that much money.
These loans are generally secured loans. You can get up to 50% of the value of your car. You will have had in your logbook to your lender.
Once the loan is repaid in full, you will get back your logbook. However, in the event of default, the lender will take back the car and recoup the rest money from you.
The bottom line
When you are caught unawares by emergencies, you would want to get access to cash this instant. Although emergency loans can help you, they are expensive. If you miscalculate your repaying capacity, you will be buried deeper into debt.
Make sure you choose a reliable lender like FloraFinance that provides these emergency loans at the most affordable interest rates. You can consider taking out a logbook loan as an alternative. As this is a secured loan, you will be able to borrow a larger amount of money and save a lot of money in interest. Payments will also not be a severe headache.
Ellie Brown is a proud resident of the UK and love to be a content writer and editor for the last 9 years. Writing blogs and articles is her passion that one can explore at the top blogging platforms. Ellie holds a key position at Florafinance as the Senior Content Editor and Chief Loan Consultant, leading a team of more than 70 professionals. Ellie Brown covers the major aspects of the UK’s lending industry in her blogs and guides loan seekers who come at Florafinance to apply for a loan. She possesses the Post-Graduate degree in Finance and Investment.