Feeling disappointed with having a bad credit history for a long time? Is there no traditional lender agreeing to grant you a loan? It is obvious because you are not a trustworthy borrower to them. What will be your next step?
Well, there are many options, like asking a friend or family member for funding help. Is this a good solution? No one can guarantee that, so it is just short-term help. What will you do next?
The problem is not just the funding gap. In fact, the actual issue is your poor credit history. As a result, no mainstream lender seems interested in accepting your loan application. It means you need to find a solution to escape the bad credit trap.
Fortunately, there isn’t just one way but many to find the solution that’s right for you. In this blog, we will discuss the methods that help you achieve higher loan approval rates with bad credit.
What is defined as loans with bad credit?
These are specialised loans for people with poor credit histories. Available for small amounts and shorter durations, bringing them into the category of high-interest-rate loans.
Why do lenders bring such high-cost loans? The fact is that, despite their high interest rates, these loans are effective for getting quick funds, especially during financial emergencies.
Now, a question may arise, “How to get loans with bad credit quickly?” Our next point of discussion will be find answers to that query. So continue to read below.
Quickest and ideal ways to get a bad credit loan
Here, we are going to ease the burden of finding a loan despite a low credit profile, and we will do so quickly. Let us discuss 5 ways one by one.
1) Apply online only
The best way to get a loan quickly is to apply online. The UK loan market has adopted digitalisation over the past few years. You can make the most out of it, as doing so may allow you to submit the loan application with minimum documentation.
Another advantage of this method is that you can apply for a poor credit loan from home, at your office, or even in a restaurant. In addition, there is little risk of error because only a few details need to be shared in the online form.
It’s better to apply online early in the day so your lender can review your loan application quickly.
- Prefer unsecured loans
There are many financial experts in the UK who prefer secured loans for bad credit. They have their points to prove that, and there is no harm in applying so. Still, it would be risky to put your assets on the verge of loss if you miss or delay the payments.
At the same time, your credit score will further drop. Therefore, you should go for unsecured loans for bad credit. In these loans, you do not need collateral to secure the availed amount. You are not going to lose anything if you default.
Although defaulting is also not good, sometimes situations may become unfavourable. In that case, you won’t lose your asset. Simultaneously, your lender can assess your loan application instantly since no collateral is required to verify.
- Choose online lenders
Traditional lenders have already denied your loan application, as you are a reliable loan applicant. Your friends and relatives are not showing any interest in financially helping you. Therefore, you may look for an effective solution by choosing an online lender.
In the UK market, the FinTech or online lenders have covered a larger space, especially in the last 4-5 years. You can shop around for the best deal and compare different lenders. Pick a loan provider that has a good record of loan approval and easily accepts a loan application of yours despite less-than-a-perfect credit score.
However, you should not overexpect that an online lender will consider loans for bad credit with no credit check. Every lender, whether a traditional or online lender, has to perform a mandatory credit assessment to ensure affordable loans only.
It is, in fact, your benefit only because you can manage the loan repayments on time with affordable loans. It will further enhance your credit score.
- Opt for a specialised funding product only
There is no doubt that loans are available in the marketplace to get you free from the trap of poor credit history. The main thing is which one you choose. We suggest that you opt for a specialised funding product only. Why? It is because of the features you get.
Let us take an example. Suppose you have a very poor credit score due to a County Court Judgement (CCJ), loan default or bankruptcy. With such a poor record, convincing a lender to give you another loan may prove tricky for you.
In such a situation, you should choose a lender offering specialised, extremely bad credit loans. These funding sources may have high interest rates. Still, you obtain the features that are meant for your situation. These include:
- Soft credit check is assured during the initial stage of the application. It keeps your credit score away from further damage.
- Generally, these loans come with flexible repayment terms. It signifies that you can choose a comfortable term to repay the loan on time.
- Providing the collateral is also not mandatory. It makes very bad credit loans like risk-free funding options.
Of course, there will be many features. In a nutshell, you have to be good in your recent financial performance to gain trust among the online lenders.
- Don’t involve any third-person
Loans with bad credit are generally short-term personal loans. You get a chance to borrow a small lump sum and repay it in a short period of time in split monthly instalments. It means you borrow an affordable amount, which you can repay within your capacity.
Therefore, the lender may not think the presence of a guarantor is mandatory as they would for a long-term loan. They believe that you are earning sufficiently to pay back the small borrowed amount. It is good for you also because if you are able to timely repay, you can bring a significant improvement in your credit score.
Similarly, the effective presence of the online lenders does not make mandatory the need for a broker. Adding an intermediary will only waste your time and money. Nowadays, you can do in-depth online research of the UK loan market and choose a reliable lender.
The final discussion
Now, let us end our discussion by highlighting what we have discussed above. There is no doubt that loans with bad credit are present all over the marketplace. The priority should be to choose the right loan from a reliable lender.
Of course, we have revealed some ways in which you should apply for an unsecured loan and do not add any guarantor or broker. Furthermore, specialised loan deals bring many favourable features for you, like flexible repayments.
Online lenders make borrowing comfortable by keeping the application procedure short and digitalised. It helps them to make quick loan decisions and approve multiple applications in a day.
There are many ways to get rid of your poor credit score. You should be sincere in your efforts and take the appropriate steps only.
