Different Types of Bad Credit Loans You Can Apply For

by timescapes .

Thanks to increased awareness and a change of attitude, people with bad credit are no longer considered outcasts. Days when bad credit was a taboo subject and talked of in low tones are long gone. The financial crisis that hit the world played a major role in changing the attitude towards people with bad credit. The perception that people with bad credit were out rightly financially irresponsible is nothing more than hot air. People are now aware of the fact that there are a number of things outside a person’s control that can actually make them have a low credit score.

That aside, if you notice that you have bad credit and facing problems getting approved for an ordinary loan, there are indeed a number of bad credit loans that you can get access to. What are some of these loans?

  • Payday loans

These are the kind of short term bad credit loans that do not require credit checks and are generally secured against a person’s pay check. They normally last between a week to even 100 days depending on the arrangement between a person and their lender. To apply for this kind of loan, a person needs to be 18 years of age, provide proof of income and be a resident of UK.

While these loans are a great alternative to people with bad credit, the only downside is that they have very high interests rates and attract a very high annual percentage rate. However, they are ordinarily approved within hours or 48 hours in the latest and are as such the best especially if you have bad credit and pressed for cash.

  • Logbook loans

As the name suggests, logbook loans are the kind of bad credit loans secured against a person’s motor vehicle. What this basically means is that a person uses their car as collateral and can be advanced a loan on providing their logbook to the lender. Unlike other kinds of loans, you continue to make use of your car as you repay the loan. If you are interested in this loan be sure to use a logbook loans calculator.

However, according to the bill of sale agreement that you signed with the lender when applying for the loan, your lender is the temporal lawful owner of your vehicle and therefore has the right to repossess it should you default or be unable to make your repayments. The merits for taking this kind of loan is that you get access to a much bigger loan amount as compared to the day loans.

Basically, most lenders will advance you up to 75% of the value of your car which could be anywhere in the upwards of 50000 pounds. This is a far cry from pay day loans which have a maximum amount of 1500 pounds and cannot be used to finance a huge financial need. The drawback for this kind of loan is that you are bound to pay twice than the principal amount you took. The number one advantage is that your credit score does not come into play when applying for it.

You can also get these Amazing logbook loans online.

  • Guarantor loans

This kind of loan allows people with bad credit get access to a loan provided that they have a guarantor who can guarantee their loan in the event that they fail to repay as initially agreed. However, the guarantor in question must be having a healthy credit history otherwise the financial institution in question will not be able to accept the said guarantor.

Still not sure what a logbook loans is? Find out here.