I need a loan but struggle with bad credit – what can I do?

Here at Moolr, we hear things like “I am in desperate need of a loan but I have bad credit a lot”. Having a bad credit rating is something that scares most people. They think that it stops them from borrowing money at all. I need a loan but struggle with bad credit – what can I do?

I need a loan but struggle with bad credit – a changing Landscape

Years ago, banks and high street lenders were the only places to borrow money. Because of this, a bad credit rating was seen as a bit of a problem for borrowers. Lenders saw such potential borrowers as a risk. It was difficult to find somebody willing to lend them money.

But not anymore.

Now, there are lots of options for people with bad credit. Or even very bad credit – to borrow money on agreeable terms from a reputable lender. You just have to know where to look. Do your research and you may surprise yourself at the options out there. Let us take a look at what those are.

Your Options

A payday loan

We have spoken before about payday loans and how they can be very dangerous and risky financial decisions. However, for very specific needs, a payday loan might be the best option. For example, if you need a small loan to see you through until payday as a one off,  they can help. They might be your best bet. However, it is still wise to tread carefully, There are lots of pitfalls that are easy to miss when taking out a payday loan. So make sure you are clued up before you apply.

Peer to peer lending

We have mentioned peer to peer lending a few times before, and that is because it is becoming an increasingly popular way to borrow money.

In a nutshell, P2P lending lets you get a loan from strangers online, a bit like getting a loan from a friend. You borrow money from individuals that are willing to lend you the money you need and who, in many cases, offer much better repayment terms than you would get from a high street bank or lender.

However, be careful, P2P lending is still a relatively new method of lending and borrowing money and its still not as closely regulated by the FCA as online and high street lenders are.

A guarantor loan

For people that say I desperately need a loan but I have bad credit, guarantor loans can be an ideal solution. Not only does possessing a guarantor make you much more likely to be accepted for a loan, it improves the rates you have access to.

Having a guarantor makes sure that, in the eyes of the lender, you are a much safer option. This allows lenders to accept you more readily. This is great because regular repayments on this loan can fix your credit score in the long run.