How To Get A Loan With Bad Credit In UK?

This post is for customers who are interested in finding out more about how they can get a loan with bad credit in the UK.

It may seem like it would be impossible to find a company that will give you funds or even consider giving you money if you have less than perfect credit, but there are many options available on the market.

For instance, some bad credit loans direct lenders in UK offer these loans to people with no credit history at all!

The post provides information on what type of loans are available and what criteria need to be met before an individual can qualify for these types of financial products. If you’re looking for information on getting a loan with bad credit in the UK then this blog post might interest you!

What Is A Bad Credit Loan?

A bad credit loan is actually a very common type of lending product. These loans are designed specifically for people who have experienced financial hardships, like defaults on previous loans, bankruptcy, or foreclosure.

That doesn’t mean that these types of loans are easier to qualify for.

It just means that the lender understands that you may not be perfect financially and therefore offers this type of loan.

A bad credit loan will typically be given to those with less than perfect credit.

Types of Bad Credit Loans?

Bad credit loans are an easier way of borrowing money for people that have a low credit score or no credit. These include payday loans, which are relatively small amounts that are paid back on the next pay day, secured loans, credit cards, and subprime lending.

There are 4 primary types of bad credit loans:

1. Unsecured Loans

Unsecured loans are the best way to go if you have bad credit or no credit at all. These loans can be used to build your credit history, decrease debt, save for college or take care of many other financial needs.

There are two types of unsecured loans: loans with no interest and interest-bearing loans. If you have a lot of debts but don’t want to take on more debt by taking out an unsecured loan then it’s best to choose the no-interest option.

If you’re looking for a short term option then this is also the best type of loan. It can be taken out without any collateral and doesn’t require any repayment until the end of the term period.

2. Secured Loans

Secured loans are not offered by all firms, but they are worth considering for people with bad credit. As the name suggests, these loans are secured with collateral – in this case usually the borrower’s house.

These loans are different from unsecured loans in that they come with a higher rate of interest and lower amount because the lender is using your property as security.

If you have bad credit then it might be difficult to get an unsecured loan so it’s probably worth applying for a secured loan.

A secured loan will require you to have equity in your home before you can qualify for this type of loan so it might be necessary to take out a second mortgage in order to get one.

It sounds like too much of a hassle but it will allow you to qualify for the loan.

In order to get this type of bad credit loan, the lender might require that your house be valued as well as an appraisal carried out before they can make a decision about whether or not to approve your application.

3. Credit Cards

Credit cards are a type of bad credit loan that allow the borrower to borrow money on a line of credit.

Credit cards are an easy way to get a bad credit loan in the UK. Credit card providers often offer these types of loans for people that don’t fit into their conventional criteria.

Bad credit loans on your credit card will come with a high interest rate, meaning you’ll need to be careful when using them because the repayments can soon add up to more than what you originally borrowed.

There are two types of credit cards for bad credit – secured and unsecured options.

Secured credit cards are backed by collateral, usually your home or car, with this type of bad credit loan there’ll be no limit on how much you borrow but it is likely that you’ll have to pay a higher interest rate than with an unsecured credit card.

Unsecured cards are based on your credit history, rather than a piece of collateral and you’ll have to pay an annual fee as well as interest – this might be worth considering if you want the flexibility of having more than one type of bad credit loan available.

4. Subprime Lending

This is a fast way for people with bad credit to borrow money.

Subprime lending is when a person with bad credit wants to borrow money from a bank that will not usually give them credit.

In order to get this type of bad credit loan, the lender might require that your house be valued as well as an appraisal carried out before they can make a decision about whether or not to approve your application.

Subprime lending is best for people that are unable to qualify for conventional or non-traditional borrowing options, like bank loans or mortgage rates, because they have bad credit.

These will normally offer a higher APR than other types of unsecured loans and will need to be paid back over a longer period of time.

How To Apply For A Bad Credit Loan?

You can get a bad credit loan by searching online for lenders that specialize in these types of loans.

You may be able to find a company or a direct lender that will give you the money you need with bad credit.

You might qualify for this type of loan if you have had trouble qualifying with other lenders in the past, have no credit history (or if your credit history is bad), have been denied for bank or nonprofit loans, are self-employed or own your own business, want to borrow larger sums of money than you normally would be able to borrow through bank loans, nonprofit loans or by applying for traditional mortgage loans.

To apply for a bad credit loan start by preparing all the documents requested by the lender and then submit them via fax or email and wait to hear back from the lender about whether they can approve you for this type of loan.

Conclusion

We hope the information we’ve provided has been helpful and makes your loan application process a little easier. If you have any questions or concerns, please don’t hesitate to let us know in the comment section.

Ani Johnson

Ani Johnson is a tech entrepreneur by profession and a passionate blogger by heart. She is on a mission to help small and local businesses grow online. She shares his journey, insights, and experiences at Content Rally & Real Wealth Business, Online News Buzz & RSL Online, The Daily Notes & Smart Business Daily.