If there are two things in life that don’t go together well, it’s bad credit and loans.
We all find ourselves in difficult financial situations at times. Sometimes, you might need a loan because you break down in the middle of the road and need someone to come and fix your car. Other times, your washing machine could explode, sending water damage through your kitchen or utility room.
Whatever the reason that you need to borrow money fast, you’ll often find that bad credit makes applying for a cash advance much harder that it should be. After all, just because you might have had issues with your finances in the past doesn’t mean that you can’t be trusted to pay back the money that you owe today.
Unfortunately, many traditional loan providers will refuse to even consider a customer for a cash advance if they don’t have a high credit rating. This can make it extremely difficult to get the flexible loans that you need.
The good news? Online loans for bad credit do exist. You just need to know where to look, and what features to look for from your providers.
Before we look at the loan options available to people with poor credit, let’s consider what credit is, and how people can end up with a bad score. Your credit rating is a score given to you that is intended to represent how trustworthy you are with money. The credit agencies of the UK track everything that you do with credit. Even people who have never had a loan or credit card will have a credit report – although their file won’t say much about them.
If you have good credit, then you’ll have a high score. This tells lenders that you’ve borrowed money in the past, paid it back on time, and had no problems with your finances. On the other hand, if you have poor credit, your score will be low. Every time you miss a payment, fail to hand over the right amount of money to a lender on time, and so on, you lose points on your credit score.
When you need to borrow money for an emergency, you’re far more likely to find a lender if you have a good credit score. Companies take a good credit rating as a sign that you know how to handle your money carefully and use it safely. The better your credit score, the better the deal you’ll get when you’re applying to borrow money.
On the other hand, if you have poor credit, then you might need to look for lenders that specialise in people with a negative history. Online loans for bad credit may come with slightly higher fees and interest rates than their traditional counterparts, but they’re also easier to be approved for.
Usually, an online loan is a cash advance that you can apply for online
Today, many people are beginning to turn to digital companies for their lending opportunities instead of traditional banks and building societies. After all, if you’re getting your loan from a company that operates entirely online, you won’t have to worry about them charging you extra fees so that they can handle overheads like real-estate and energy bills for their brick-and-mortar location.
Online loan providers often specialise in offering short-term loans, like payday cash advances, and small loans. They’re there for when you want to borrow money quickly and pay it back as soon as possible. If you’re looking for a more traditional lending opportunity like a personal loan or a mortgage, then you may still need to seek the help of a local bank.
Online loans designed for people with bad credit are there to give emergency cash options to people who don’t have the best credit score. If your credit history has stopped you from getting the money that you needed in the past and you can’t afford to be rejected for a loan, a bad credit provider can help.
Most of the time, loans designed for people with bad credit come with slightly higher interest rates and slightly lower loan amounts. However, they also offer understanding and a lack of judgement when you need it most. With a bad credit provider, you can get the money you need without any complicated questions and long forms to fill out.
Some loan providers online today can even make applying for your loan so easy that you’ll see your cash advance in your bank account within a matter of hours.
One thing you should always keep in mind when you’re applying for a loan or cash advance is that every application you make leaves a mark on your credit history. The more you apply for a loan and get rejected by traditional lenders, the more black marks you’ll have on your credit history, warding off future companies that might have been willing to give you money.
If you know that you have a poor credit history, it’s usually a good idea to go straight to a provider of loans for people with bad credit. These specialist lenders will look at other factors besides your credit score to determine whether you’re eligible for a loan. Though they’ll still need to conduct a credit check to adhere to the rules of the FCA, they’ll be able to ignore a low number if you can prove that you’re capable of paying the cash back that you owe.
Online loans for bad credit applicants check things like your current affordability level, and your monthly income, to see whether you’re just getting yourself into more trouble by applying for a loan, or whether you’ve considered your situation carefully.
By going straight to a specialist provider, you can reduce the chance that bad credit will stop you from getting the money that you so desperately need. What’s more, you can reduce the number of black marks left on your credit report.
When you start searching for online loans, you’ll notice that many of the options available to you are very similar. This is because the Financial Conduct Authority has put caps in place to reduce the amount of interest and fees that you can be charged for any loan. For instance, you should never have to pay more than £24 in interest for every £100 you borrow on a short-term or payday loan.
However, just because all bad credit lenders are regulated by the same FCA restrictions, doesn’t mean that they will all give you the same deals. Sometimes, you’ll be able to get a much better offer for your loan simply by comparing your options online. Like with any other loan provider, a comparison website can give you a rundown of the APR, fees, and other elements of a loan that you might want to consider before you sign on the dotted line.
Remember, just because you have bad credit, doesn’t mean that you have to accept a loan from the first person who will approve your application. Even if you don’t have a guarantor. Looking through some of the various options available from a host of different providers could save you a lot of money in the long term. Remember to compare things like:
It’s also worth visiting the website of any provider that you’re considering using so you can find out more about their customer service options and reputation. When you’re dealing with a financial emergency, it helps to have an understanding loan provider on your side that can assist you.
When you’re in a hurry to get your hands on some extra cash, and you don’t have time for complicated applications and judgemental loan providers, online loans can be an excellent choice. Within a matter of minutes, you’ll be able to set up your account, submit your loan application, and hopefully gain approval from the provider that you want to work with.
If you have a poor credit history, a bad credit specialist will ensure that you have the best possible chance of getting the money that you need, without risking more damage to your credit history. When you pay the money that you borrow back on time, you’ll get an instant boost to your credit score, showing the credit agencies that you deserve trust.
The most important thing to remember is just because you have bad credit, doesn’t mean that you don’t have any options. You’ll still be able to compare your options from a range of providers.