The great news is that you can still get a loan with bad credit. There may be extra conditions placed on the loan, or different criteria to fulfill but it is still possible.
Loans With Bad Credit
Here are some of the different kinds of bad credit loans that are available, and a few of their pros and cons.
Types of Loans Available for Bad Credit
- Unsecured personal loan – you can borrow and not need to use your property as a security.
- Secured loan – this is where you use you property as a security. You will be able to borrow more money than through an unsecured loan, but keep in mind that there is a threat to your property if you fail to keep up with the repayments.
- Peer to peer loans – these kinds of loans generally have higher interest rates because they are taken out with a group of investors rather than with a building society or a bank.
- Guarantor loans – these are loans that a guaranteed by a third party such as a family member. These loans will have lower interest rates because if you miss a payment, the guarantor will have to cover them. Budgeting loans – these are loans for people on benefits which are offered by the government.
Pros And Cons of Bad Credit Loans
The major benefit is that you can actually get a loan with bad credit. This can be an absolute life saver when you are unable obtain a normal loan. Also, if you stick to the payments, a bad credit loan will help improve your credit history.
The biggest downside to these types of loans is that interest rates will be higher than standard loans as your credit history presents a bigger risk to the lender. The best thing to do is to shop around for the best deal, that is most appropriate for you circumstances, or seek the help of experts who will be able to guide you to the best option for you.