How to find loans for a bad credit rating

Applying for a loan with a bad credit rating is possible although many people think it is impossible. There are however many lending institutions which provide different forms of loans to people with bad credit ratings.

Types of loans

Unsecured loans You can apply for this type of loan from a specialist lender. Basically, this is a form of loan where you are not required to provide collateral. Thus, your personal possessions will not be at risk. The lender will just assume the risk and does this by charging you high interest charges. This is why such loans have got a higher risk. Lenders are not willing to giver large amount for unsecured loans because of the risk involved. The highest they can go is £25 000. An example of another unsecured loan is the popular bad credit payday loans. What you may need to know about unsecured loans is the fact that if you default, your case may be referred to collectors and they have the right to repossess your assets. Secured loans bad credit You can also borrow a secured loans in UK, where you are required to provide the lender with a collateral. The most commonly used collateral is immovable property like a home. If however the loan you need is small, you can use your car as the collateral. Although you may have a bad credit rating, the collateral will provide a safety net to the lender. If the borrower fails to pay back the loan, they will be able to get their money back. You can get this type of loan from any secured loan company.

Using credit cards

If your credit rating is negative, you could also try to use credit cards for people with bad credit. If you use these cards, approval can easily be done. Using a credit over a loan can be advantageous. It is flexible because unlike a loan, you can pay back the lender at any time and the money which you pay back to the lender will become available for credit. Payday loans These are short term loans you can take on the promise of paying them on your next payday. Many lenders do not carry a credit check on payday loans. Payday loans are limited in terms of the amount you can borrow. The highest amount you can get can be up to £1000. It is basically for people who need quick small loan amounts to cover their emergencies