Top 3 Quick Loans for People with a Poor Credit Rating
When a person applies for a loan, the chances of its approval depend on several different factors. These include work history, current job, debt to income ratio, condition of the house, and, most importantly, the credit score. The majority of the loans available out there take credit score into consideration more than anything else. And if you have applied for those loans with a poor credit rating, then there are high chances that your loan application will be rejected. The reason behind this is simple! When a lender comes across an application with a poor credit history, they see that person as a risk. Your credit rating drops when you have too many financial problems, and a person with extra financial problems is more likely not to return the loan in time. That is why your bank or loan lender will think multiple times before approving your application.
So, does this mean that a person with a poor credit rating cannot get a loan? The simple answer is no. Just because you have a bad credit history does not mean you will not be able to get a loan to resolve your financial issues. Over time, lenders have come up with different kinds of loans that are designed specifically for people with bad credits. These loans are created for people with negative credit history to help them climb out of their financial troubles. However, the rules for these bad credit loans are much different than the traditional loans, and in some cases, you may have to face high-interest rates as well. Some of them might even require you to show some assets or need someone to back you up. Below in this article, I have mentioned some loans that you can get approved quickly, even with bad credit. Let’s have a look:
Guarantor Loans
If you are going through some financial crisis and need a quick loan to get out of it, then guarantor loans can prove quite helpful for you. The best part about the guarantor loan is that you don’t need a positive credit history to apply for it. While taking out a guarantor loan, you will need a close friend or a family member to co-sign the loan with you. The person who will sign the loan with you will be referred to as your guarantor. The purpose of having a co-signer is that it satisfies the lender that they will get their money back even if the borrower doesn’t improve their credit history. The person who is cosigning with you is agreeing to the fact that if you fail to make the loan payments, they will do it for you. This loan creates a win-win situation for both the lender and the borrower. The lender has peace of mind that their loan will be returned safely, and the borrower does not have to go through extreme measures or mental stress to find out other options. Moreover, the borrower can work on improving the credit history peacefully.
When it comes to picking up a guarantor, it is up to you who you go with. In most cases, it is either the spouse of the person, a close friend or a family member. The guarantor does not just have to agree to help you; they also need to have a good credit history. The more solid their credit history is, the more likely you are to get that loan. With the help of this simple method, you are not only able to get a quick loan, but you can get with normal interest rates, which can help you repair your credit history in the long run. If you are looking to get a guarantor loan, you can check Nowloans guarantor bad credit loans as well.
Secured Loans
Another type of loan that you can get even with a bad credit history is a secured loan. Just like the name suggests, a secured loan is a loan where you provide some sort of security to a lender. This could be collateral that you provide in the shape of your car, your property, your jewelry, or anything valuable. Getting a secured loan is much easier than getting other types of loans with bad credit. You also get decent interest rates and a better loan capital because the lenders do not hesitate when they know you have a greater incentive to pay back your loan. This loan is an excellent option if you need quick cash with bad credit; however, this loan is also quite risky. If you fail to pay the loan, you can use your car, home, or whatever it is that you have put up as collateral. The most popular types of secured loans include home equity loans, auto loans, and mortgages. However, a lot of lenders offer secured personal loans as which is something that will suit a lot of people with bad credit history
Payday Loans
Payday loans are quite different than most of the other types of loans. People take out payday loans when their salary has run out, and they still have bills to clear. Unlike other loans, a payday loan doesn’t span over a long period of time or provides you much money. The max amount of money you can get with a payday loan is not higher than £1500. Also, you have to pay the loan back in a matter of two to three weeks. There are many payday loan providers out there who lend this loan to people with bad credit history as well. However, there are certain conditions that you have to meet before you apply for it. If you have a job, then all you need to do is show your payslips, and if they are good enough, your loan will be approved regardless of your credit history. Some payday loan lenders also allow you to use a value as collateral. You will just have to find the right lender, and you will be able to get your payday loan approved. Just keep in mind that due to their short-term nature, the interest rates are usually high on payday loans.
