Having bad credit makes it almost impossible to get a loan when you need one to consolidate bills or buy a vehicle. However, there are loans which people with poor credit can qualify for if they are willing to meet certain rules and conditions. Here are four types of bad credit loans which are currently available.
Logbook Loans
If you have a vehicle, you may be able to qualify to receive a logbook loan. This type of loan uses the vehicle as security, whether it is a car, motorcycle or van. With a logbook loan, you can expect a very high rate of interest, but if you’re in a position in which you need the money, you may have no other choice if you have bad credit. Be careful about using this type of loan on a primary vehicle, because in the event that the loan cannot be repaid, you could lose the vehicle.
Payday Loans
A payday loan is a short-term loan you can take out for just a few pounds to get you through until your next payday. However, some payday lenders offer thirty-day loans, so you may be able to borrow more money. Like most bad credit loans, payday loans have high interest rates and the penalties for not repaying the loan in time can end up putting you in a worse financial position. If you need just a few pounds until your next paycheque, then a payday loan can be a good option.
Guarantor Loans
While most bad credit loans do not require someone else’s signature for you to borrow money, a guarantor loan does. You need to have someone you know with good credit and who is a homeowner sign the loan before you can get any money from the lender. If you do not make the loan repayments, then the guarantor will be responsible for paying the lender for the amount you still owe on the loan.
With this type of loan, the amounts which can be borrowed are much higher and the loan terms are for at least 36 months. As with many other bad credit loans, you can apply online to see how much you can borrow with a guarantor loan from TFS.
Homeowner Loans
Even if you have bad credit, you may be able to borrow money by securing the loan with your home. Of course, the biggest downside to this type of loan is that your house will be at stake if you default on the loan. However, these are long-term loans which can be repaid over several years with a lower interest rate than most bad credit loans, so you can easily add it into your budget. The loan can help you consolidate bills, pay off credit cards, or make home improvements.
You can apply for most bad credit loans online, and the credit decisions can come in as little as 24 hours. With some loans, you may get decisions the same day, so you can get the money quickly for any bills or expenses which you need to pay.