Loans For A Bad Credit Rating – What Are Your Options?
It was not too long ago that a bad credit rating would have been enough to see the majority of lenders running for the hills at the site of your loan application. However, things have now changed for the better and although you may still not be eligible for the most competitive loan and credit card rates, there is a great chance that you will be eligible for some form of affordable loan.
With specific loans for bad credit now available from websites such as allcreditloans.net who are currently offering affordable easy loans, there has never been a better time to explore your options.
If you have a bad credit rating, your best bet for getting a low-interest loan is to increase your credit score. But this, really, is easier said than done for a lot of people. You do, however, have loan options, even if your credits score hits rock bottom.
Some of the best bad credit loans available in the UK are known as loans for a bad credit rating which will be available despite your credit score.
In this article, we're going to list your options for getting a loan.
Option No. 1 - Co-signed Loans
You can ask someone who has a good credit score to co-sign a loan agreement with you. Co-signers are people who know and understand your situation and believe in your ability to repay your loan. This is one of the best options for people with a low credit score because the loan institution will take into account your co-signor's credit score.
Just remember, however, that if you don't repay your debt, the co-signor will have to repay it and the default will reflect on both your credit scores. You can get a co-signed loan from traditional financial institutions like banks.
With specific loans for bad credit now available from websites such as allcreditloans.net who are currently offering affordable easy loans, there has never been a better time to explore your options.
If you have a bad credit rating, your best bet for getting a low-interest loan is to increase your credit score. But this, really, is easier said than done for a lot of people. You do, however, have loan options, even if your credits score hits rock bottom.
Some of the best bad credit loans available in the UK are known as loans for a bad credit rating which will be available despite your credit score.
In this article, we're going to list your options for getting a loan.
Option No. 1 - Co-signed Loans
You can ask someone who has a good credit score to co-sign a loan agreement with you. Co-signers are people who know and understand your situation and believe in your ability to repay your loan. This is one of the best options for people with a low credit score because the loan institution will take into account your co-signor's credit score.
Just remember, however, that if you don't repay your debt, the co-signor will have to repay it and the default will reflect on both your credit scores. You can get a co-signed loan from traditional financial institutions like banks.
Option No. 2 - Peer-to-Peer Loans
Peer-to-peer loans are nothing new, they have actually been around since 2005. This type of loan takes away the institutions in favour of the individual. When you sign up at peer-to-peer loans websites, you can post a loan listing complete with the amount you need and why you need it.
Different individual investors will then take a look at your listing and see if it meets their criteria. Like banks, peer-to-peer lenders also screen their applicants and check their credit scores. However, because they are individual people, you will most likely find a P2P lender who is sympathetic to your situation.
The good thing about P2P loans is that the interest rates are relatively low at 6.5% on the average. There are many P2P credit websites out there, and it's important to note that not all of them are created alike. Some are better than others.
Peer-to-peer loans are nothing new, they have actually been around since 2005. This type of loan takes away the institutions in favour of the individual. When you sign up at peer-to-peer loans websites, you can post a loan listing complete with the amount you need and why you need it.
Different individual investors will then take a look at your listing and see if it meets their criteria. Like banks, peer-to-peer lenders also screen their applicants and check their credit scores. However, because they are individual people, you will most likely find a P2P lender who is sympathetic to your situation.
The good thing about P2P loans is that the interest rates are relatively low at 6.5% on the average. There are many P2P credit websites out there, and it's important to note that not all of them are created alike. Some are better than others.
Option No. 3 - Credit Unions
Credit banks are similar to banks in the way they work, however, unlike banks they are typically owned by people in the same industry or are living in the same area. You can find better rates at credit unions as they are non-profit organizations. Find a credit union in your area by searching on Google.
For more information regarding credit unions, please check out the following link - https://en.wikipedia.org/wiki/Credit_union
Option No. 4 - Secured Loans
If you have equity on your home but are short on cash, you can use that equity to take out a home equity loan, or a loan that uses your house as collateral. Just take note of the risks involved: If you're unable to repay the loan, the bank can repossess your property.
Secured loans, however, do have one good advantage: They have lower interest rates compared to unsecured loans.
Option No. 5 - Unsecured Loans
If your credit score is somewhere in the middle, between 600 to 700, you can get a low-interest loan from creditors that specialize in unsecured loans, or loans that don't need collateral.
If your credit score falls below the baseline 600 score, it can be difficult to find a creditor willing to give you a low-interest loan collateral-free.
As you can see from above, even when you have a low credit score, it is possible to get loans from different place. You can even get a loan from banks, provided you know someone who's willing to co-sign a loan for you.
The Money Advice Service explores the difference between secured and unsecured loans in greater detail in the following article: Secured and unsecured borrowing explained
Assessing All Options
We're not going to tell which option to go for, but we are going to tell you to explore your options. Do research before deciding which one actually gives you the best interest rates.
If none of the above-stated options work for you, you can always get a loan from your family and friends. Just remember to treat your friendly loans like any other business transaction, and document your agreement with specifics on the loan amount and when you're going to repay it.
But really, if you are in no rush to get a loan, you should consider increasing your credit score first. Increasing your credit scores isn't rocket science. Sometimes it can be as simple as paying your credit card bills on time. If you need help with this, there are many counselling websites out there that are dedicated to helping people with bad credit scores improve their standing.
In the following video, Martin Lewis, the Money Saving Expert, offers a number of excellent ways to help improve a poor credit rating:
Credit banks are similar to banks in the way they work, however, unlike banks they are typically owned by people in the same industry or are living in the same area. You can find better rates at credit unions as they are non-profit organizations. Find a credit union in your area by searching on Google.
For more information regarding credit unions, please check out the following link - https://en.wikipedia.org/wiki/Credit_union
Option No. 4 - Secured Loans
If you have equity on your home but are short on cash, you can use that equity to take out a home equity loan, or a loan that uses your house as collateral. Just take note of the risks involved: If you're unable to repay the loan, the bank can repossess your property.
Secured loans, however, do have one good advantage: They have lower interest rates compared to unsecured loans.
Option No. 5 - Unsecured Loans
If your credit score is somewhere in the middle, between 600 to 700, you can get a low-interest loan from creditors that specialize in unsecured loans, or loans that don't need collateral.
If your credit score falls below the baseline 600 score, it can be difficult to find a creditor willing to give you a low-interest loan collateral-free.
As you can see from above, even when you have a low credit score, it is possible to get loans from different place. You can even get a loan from banks, provided you know someone who's willing to co-sign a loan for you.
The Money Advice Service explores the difference between secured and unsecured loans in greater detail in the following article: Secured and unsecured borrowing explained
Assessing All Options
We're not going to tell which option to go for, but we are going to tell you to explore your options. Do research before deciding which one actually gives you the best interest rates.
If none of the above-stated options work for you, you can always get a loan from your family and friends. Just remember to treat your friendly loans like any other business transaction, and document your agreement with specifics on the loan amount and when you're going to repay it.
But really, if you are in no rush to get a loan, you should consider increasing your credit score first. Increasing your credit scores isn't rocket science. Sometimes it can be as simple as paying your credit card bills on time. If you need help with this, there are many counselling websites out there that are dedicated to helping people with bad credit scores improve their standing.
In the following video, Martin Lewis, the Money Saving Expert, offers a number of excellent ways to help improve a poor credit rating: