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Representative Example: Amount of credit: £1,000 for 12 months at £107.53 per month. Total amount repayable of £1,290.36. Interest: £290.36. Interest rate: 49.9% p.a. Fixed*. 49.9% APR Representative. Rates between 9.9% APR and 1,295% APR.
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Knowing how to get a loan with bad credit in the UK can help you out of a tough spot.
You might find yourself with bad credit for several reasons. It could be because of missed repayments, failed credit applications, having borrowed in the past and not been able to make timely payments, and so on.
Without sugar-coating, regular loans against bad credit histories are usually rejected. It is advisable to assess your financial situation before applying for a loan as it can further damage your score.
Your credit report is checked by banks and financial institutions responsible for using loans. The interest rates and length of loan are often calculated based on your credit score.
However, with bad credit loans, the approval is based on affordability and not credit history, but they usually come with higher interest rates.
That is why you should apply for bad credit loans only when necessary, such as in the following situations:
Securing this type of loan is less hassle than opting for a personal loan from a bank or financial institution. You just have to find a £100 loan direct lender willing to overlook the fact that you have bad credit.
All you need is prove that you will be able to pay it off on time (by providing details of your income and expenditure).
Your best option is to use broker sites that work with lenders who offer these loans - like Loanza. We have a wide network of lenders who offer bad credit loans in the UK.
The biggest advantage of online paperwork is that the application is processed faster.
The application procedure to borrow this amount is easy. You just need to provide information like personal details, a valid physical address proving you are a resident in the UK, details about current employment, work history, etc.
Once you submit the application, the amount of money is checked against different lenders in the broker's database. If the information is correct and a lender agrees to give you 100 pounds, you will be taken to their website to finalise your request. Once approved by the lender, your cash can be transferred to your bank account in an hour. Rest assured, almost everyone gets through this stage.
At Loanza, we aim to make it convenient for you by connecting you with your best fit lender based upon your requirements.
Once you get the money in your account, you can use it for anything you wish to – there are no conditions on the usage of money. However, bad credit loans should not be used for frivolous spending! Only take a loan if you really need it.
The interest rate could vary depending on your credit rating and the lender. You can find out about your repayments and interest rate while completing your application.
If there is any aspect of the process you don’t comprehend, please ask the lender. Remember, before signing your agreement, there is no obligation. If you don't like the terms offered to you, you can just not accept them.
Payday loans are best for those who need quick and easy cash, while avoiding mountains of paperwork and formalities.
These are also referred to as cash advances as the funds are to be borrowed on a post-dated check, which is cashed on the upcoming payday of the borrower.
Keep in mind that these loans have a high rate of interest even though they are low balance and short-term cash loans. They can be due within a couple of weeks from the date you take out the loan or later on.
You might have to give a post-dated check to the lender for the loan amount, along with the interest as well. The payment might then be taken out directly from your bank account when the loan is due.
The repayment date is clearly specified in the loan agreement, so the whole amount (loan + interest), has to be paid off by then.
If you need an extension of the time period as you are unable to pay off the amount, talk to the lender, explain the problem, and move forward accordingly.
You can choose to pay off as much as you can on the repayment date even if it isn’t possible to pay the full amount. This helps keep the interest rates down. An extension might cost you additional fees though.
If you need cash and are unable to get it via a traditional financial institution, then peer to peer loans is the best alternative.
This way you don’t have to depend on any institution as an intermediary.
You deal directly with the lender, so the requirements of securing these loans are relatively simpler to fulfill and minimal. The approach is more personalised, so you can still convince them to grant the loan even if your credit score is bad.
There is no pre-penalty involved, as the lenders put their trust in you to return the money. No penalty is levied if you are able to pay off the loan earlier than the scheduled repayment.
The interest rates for peer to peer loans are generally lower as compared to the other types of loans, but then again it depends on the lender.
If you apply online, these types of loan requests can be completed in 7 to 10 days. It depends on how fast you can provide the proper information and meet requirements. You can avoid a ton of paperwork this way.
While getting low-interest rates on bad credit loans is nearly impossible, conduct thorough research and seek out lenders who offer comparatively lower rates. Read the terms and conditions carefully, especially the fine print, to ensure there are no surprises.
Having bad credit doesn’t automatically disqualify you from getting a loan. There are options for getting loans with bad credit in the UK, as we’ve outlined them in this article.
Before taking out any bad credit loans, doing your research can help you decide which one is best for your situation.
With Loanza, you can feel in safe hands - but make sure you check your loan terms thoroughly with the lender we connect you with before you sign anything.