Loans displayed have term lengths between 6 months and 7 years, 18.2% APR and 49.9% APR.
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If you currently experiencing financial difficulties or have damaged your credit score in the past, you may worry about not qualifying to borrow for a personal loan.
However, there are personal loans for bad credit available. Even if you think you have no credit there could be a loan available. You may be able to borrow from a high street lender at a higher rate than their standard personal loans. Alternatively, you could borrow from a specialist company who lend to those with bad credit. So you don't necessarily need a bank loan for a bad credit loan, there are alternatives (but make sure you check out who you will be dealing with and don't get caught out with a dodgy lender).
If you have bad credit some lenders will require you to have a guarantor before they’ll lend to you. A guarantor is someone who is willing to step in to meet your repayments if you find yourself unable to.
If this option is not available to you, it is possible to get a no guarantor bad credit loan, it may need to be secured against your home or it can be unsecured, but will likely come at a higher than typical APR.
The most obvious answer is that it provides access to credit to those who otherwise would be locked out of borrowing.
Typically a loan will be a cheaper way of borrowing money than through a credit card, you can also usually borrow more and plan the lifetime cost of the loan up-front.
Also it can help those with poor credit ratings to repair their credit score. If all repayments are met for a bad credit loans are met on time, this demonstrates that borrower is reliable and they will see their credit score improve.
Typically the interest rates charged are significantly higher for those borrowing on a bad credit score. Unfortunately those applying for bad credit loans typically have had difficulty managing their finances in the past. Lenders will consider them to be higher risk borrowers and will charge higher rates to reflect this.
As with any personal loan if you don’t keep up with repayments you could face penalties charges and even CCJs or Bankruptcy.
Longer repayment periods should give you lower monthly repayments, but ultimately you will pay more interest than if you try and pay the balance off quickly. Though, either way make sure to not overstretch yourself and ensure the monthly repayments are within your budget.
Often interest rates for loans get lower the more you borrow, based on a tiered system. If you are almost borrowing enough to benefit from the lower it rate of the tier above, it might be worth borrowing a little bit more to save money on the lifetime of your loan. Importantly, make sure you only borrow what you can afford.
It could be worth starting off with smaller loans and working up to larger amounts as you improve your credit score through sustainable borrowing.
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