Bad credit loans are a way for you to borrow money if you have been refused credit in the past. They can also be a way of borrowing if you have got a lower credit score or no credit history at all and you are finding it difficult to be accepted for any credit.
Bad credit loans will often come with a higher interest rate though. And you will often need to have secured another way to meet your loan repayments in case you find it difficult to pay back the loan in the future. This could be using the value of your house as a guarantee that you will be able to take money from it to then pay back the loan.
Or you might have a friend or family who could meet the repayments for you if you weren’t able to. This helps to give a lender peace of mind that they will get the money they lend you back, and makes them more likely to lend to you if you have had trouble borrowing money before. You will normally need to be over 18 and in employment to be able to get a bad credit loan. You can get a bad credit loan from a bank, a credit union, a private business or a lender.
If you have been refused a loan or credit card in the past then this will appear on your credit report as a search and can affect your credit score. And if you’ve found it difficult to pay back money you’ve borrowed from a lender in the past then this can also appear on your credit report as a default, and can affect your credit score.
Plus, a lower credit score and marks on your credit report can make it harder to find a loan. There are a few types of loans that you might find it easier to get approval for if you do have bad credit.
The benefits of a bad credit loan can
A way of borrowing money: If you’ve got a bad credit score and you have been refused credit in the past then a bad credit loan can be a way for you to borrow money.
Rebuild your credit score: Additionally, a poor credit loan can help to rebuild your credit score and credit history if you meet your monthly repayments.
Quick access to your loan money: Also, your loan will usually be paid into your account within days of your application being approved. And sometimes even immediately. You can make your purchase or consolidate your debts quickly