If you have poor credit, you may still have options that could help you through a rough patch. One of these options is to get a bad credit loan. Even though taking out a loan in this situation may be a bit more of a struggle, so-called “bad credit loans” are available to people who don’t have a good credit history.
There are certain types of bad credit loans that you can get, including payday loans, guarantor loans and multi-month loans.
A payday loan is exactly what it says on the tin: It’s a loan that you can pay back after your next paycheck. Be sure to make the payments on time as interest rates can be high. These types of loans are often helpful if you need money urgently and are willing to pay it back over a relatively short period of time. Payday loan lenders often decide instantly whether to approve an application, which makes it easier for you to plan accordingly.
Also known as instalment loans because it requires borrowers to pay back the money in instalments. You will often have to repay more than what you borrowed if you choose this option, but it can be manageable in smaller lump sums. Multi-month Loans are short-term loans that can allow you to receive money instantly – even on the same day of your application. They are therefore usually a convenient option if you are looking to borrow smaller amounts.
Guarantor loans are specifically designed for borrowers with poor credit. They are guaranteed by a family member or friend who promises to pay back the remainder if the borrower can’t. This could be an option if you are looking to purchase a new car. However, pay attention to the costs associated with this loan. Usually, the terms depend on how low your credit score is. If you’re offered a more expensive loan and have a low credit history, you probably won’t be able to borrow very much.
Things to remember:
There are some things that could help you get a better deal and organise your finances in a way that will give you more control.
- Try and work on your credit score. Borrowing and repaying on time has a massive positive impact on your credit score. If you take out a loan, manage your repayments so you don’t miss a payment date.
- By following a monthly budget, you will be able to avoid going further into debt. Work hard on sticking to your plan and try to find options that could help you save money. Comparing the prices in grocery stores can make a bigger difference than you might assume. Buying household items and clothing second-hand or looking for bargains can also help save money.
- If you struggle to repay, speak to the lender and discuss your options. They know how hard it is to repay debt and can most likely offer a good solution.
While poor credit can be frustrating, don’t worry. There are some good options that can help you recover your credit score.