Bad Credit

3 Top Quick Loans for People with Poor Credit

Having a low credit rating may hamper your chances of getting a loan, especially from banks and other high street lenders. Credit rating refers to a person’s capacity to fulfil his financial obligations or pay back a debt or loan. How do lenders know your credit history or rating?

In the UK, three major credit reference bureaus collect data or information regarding the habits of people when it comes to credit or borrowing. A lender that wants to check your credit rating may visit the website of TransUnion, Equifax, or Experian. You may also do this if you want to know if you will qualify for a specific loan. However, having a bad credit rating does not mean that you would never be able to borrow money for your emergency need.

Many lenders in the UK specialise in extending credit to people that banks and other big financial institutions would consider high risk.

Here are the three top quick loans that you can take if you have poor credit.

Logbook Loans  

In the UK, a car or any vehicle is not only a mode of transport; it can also become handy when you are in dire and immediate need of cash because you can take a logbook loan with your vehicle as collateral. Because you have provided security for your loan, the lender will not check your credit rating anymore.

A logbook loan would lend you £500 to £50,000, depending on the value of your car. When you apply for a logbook loan, the lender will ask you to submit the logbook or registration documents of your vehicle.

The lender will ask you to sign an agreement and a bill of sale, which states that the lender is the temporary owner of your car until you have paid up your loan. Failure to settle your debt would allow the lender to sell your vehicle as repayment of your loan. Nevertheless, when you have paid your loan, the lender will return the registration paper of your car.

Some logbook loans take two to three days to process. However, you can check which lending companies offer a quick loan, which means that you can have the funds a few hours after the approval of your application.

Text Loan 

A text loan is a new loan product wherein the borrower and lender communicate through text messages. Borrowers find the process very convenient. All that one need is a mobile phone or tablet. Borrowers send the application form via text messages. The lender will send a text message when he approves the application and releases the funds to the borrower’s bank account. Borrowers repay the loan through accredited payment centres or the borrower’s bank.

The lending company usually releases the funds within 24 hours upon approval. You can borrow from £1000 to £10, 000. While taking a text message loan could be quick and easy, it is also quite expensive.

Guarantor Loan

Another way of borrowing money despite lousy credit is taking a guarantor loan. You can borrow from £1000 to £10, 000 regardless of your credit rating. To avail of this loan product, you will need a second person to act as your guarantor. A friend or relative that is willing to help you find a solution to your financial woes can be an excellent choice. A guarantor must have a good credit rating a means of paying up your debt if ever you default.

To make sure that the loan will not cause any damage to your relationship, always pay back your loan promptly until you have made the last payment. Letting your guarantor pay back your debt could cause a rift in your relationship.

By Scott

As a financial consultant, I have met people from all walks of life who have had experienced taking a loan as a last resort, to fulfil their dire need. However, knowledge regarding loan requirements, interest rate, repayment period, and the terms and conditions of the loan will help people find the best solutions to their financial woes. I believe that through my experiences working with people and organisations in the finance industry, I can help others develop an understanding of the nature of different loan products and credit services. Through the information that I share, they can make educated decisions when seeking solutions to their financial woes.