- Emma Parker
- April 22, 2022
You can quickly get it with favorable factors if you need a loan. But if you add a clause of bad credit, you may face many difficulties getting a bad credit loan.
With bad credit, lenders check many factors along. Bad credit loans may be helpful for some and maybe harmful for some. If you have a bad credit history, you can definitely apply for finance, keeping other factors in mind.
Alternatively, you can build your bad credit score and then apply for guaranteed bad credit loans. Many people first improve their credit score and then apply for a loan.
When the credit score is not suitable for borrowers, they are being offered higher interest rates. The repayment terms are also as per the lender, along with these interest rates.
Dual Side of Guaranteed bad Credit Loans
Many people have bad credit and yet enjoy the benefits of the loan. The loan approval also depends on the existing financial situation of the borrower.
If the borrower has a good repayment capacity, they can be offered a good amount for their bad credit loan. As a bad credit borrower, you can also borrow 12 month loans for unemployed from direct lenders.
Bad credit loan is usually available online. They are available quickly. It takes only less than 15 minutes or an hour to get your loan approved. There is a quick Response for the approval of your bad credit loan.
If you are applying for a bad credit personal loan, you can use it for any purpose. There is no specific purpose for this loan.
For example, particular loans are specific to their usage. But with guaranteed bad credit loans, you can easily use them to buy a home, purchase your own car, home renovation, wedding expenses and many other things.
This is a multipurpose loan. Except for any illegal activity or gambling, you may make use of these loans anytime, anywhere.
Repair your Credit History
With these loans, you can quickly repair your bad credit. If you make the payments on time, you are climbing one step towards your good credit.
Also, as a responsible borrower, this shows your responsibility towards your loan repayment.
This improves your credit score and also keeps you in the good books of various lenders. Hence, you can quickly repair your bad credit history with these loans.
High Chances of Acceptance
With bad credit, there are high chances of being accepted. Many lenders and brokers consider people with bad credit history.
If your current financial situation is fine, you are accepted for guaranteed bad credit loans.
Compared to the mainstream one, the chances of approval are much higher in this kind of loan. Although you may have limited options, the chances of approval are higher.
There will be many advantages to bad credit, but the interest rates offered on these loans are too high. Since the credit history of a borrower is bad, this poses a risk to the lender.
To eliminate the risk in the lending, lenders pose a high-interest rate on loans. This makes the loan more expensive as it increases the cost of borrowing. With high-interest rates, it becomes difficult for you to repay the loan.
Therefore, ensure your repayment capacity before getting into the loan agreement with the lender.
Fixed Repayment Terms
Unlike other loans, the repayment terms are fixed in guaranteed bad credit loans. There is a set amount that you have to pay every month.
You cannot miss out on your repayments every month. Hence, it is essential to analyze your repayment capacity. If you are unable to repay, you can avoid borrowing these loans. Upon default on these loans, it can further damage your credit score.
Eventually, this will get you stuck in financial difficulty. Once you have missed your payment, you will further damage your credit score and be in the bad books of the lenders.
No more lenders will entertain you and offer you any loan. Hence, it is essential to analyze your repayment capacity before borrowing loans.
Replacing one Debt with Another
If you borrow these loans, you may still have an outstanding balance to pay. Alternatively, you can go for free debt service from many organizations.
Once you receive a bit of advice, you can work on that advice and improve your credit score. It will be easier for you to apply for a loan with any lender with a good credit score.
Always make sure to check your debts before getting your loan approved.
What Other Options do I Have?
With bank credit, you can quickly get on to other options. If you are not being offered guaranteed bad credit loans, the following other options are for you.
Try to focus on improving your credit score. Making repayments on time is an essential factor in repairing your credit history.
You can contact the credit rating agencies. If you contact them, you will get a complete history of your credit score.
Check with all the loopholes available on your score and try to eliminate them. If in case you’re still not able to repair your credit, you can consider the following things.
Instead of a bad credit loan, you can go for a secured loan. You can quickly put that as collateral if you have an asset with you, such as a car or house. With a secured loan, you will not pose a risk to the lender.
Also, the lender will be willing to pay you a good amount of money. If in case you are able to miss the repayment, the lender may seize your asset. Hence, you have to be very careful while applying for loans with bad credit.
There is a benefit of getting loan interest rates on your loan with secured loans. Although every lender has different criteria, you can still stand a higher chance of getting lower interest rates.
If you do not have any assets to put in for a loan, you can go for a guaranteed loan. Refer to any friends or family who has a good credit score.
They can become a guarantor with your loan and get you the money for your financial needs.
This can pose a risk to the guarantor; hence it has to be checked with the guarantor first. If you default on your payments, the lender may straightaway go to the guarantor for his pending financial amounts.
Hence, before getting into any agreement, always understand the financial implications of such loans. Upon default, you both will be liable for the debt borrowed.
Free Debt Advice
As mentioned above, you can have a piece of free advice. If you cannot decide anything for yourself, go for free debt advice.
This advice is non-judgmental and unbiased. This way, you can understand your financial situation and the right step to take.
If you have bad credit, you have to be careful when deciding on your loan requirements. If you get loan approval with your bad credit, make sure to make the repayments on time. This can help you improve your credit score and get guaranteed bad credit loans in the future.
Emma Parker is a financial counsellor at LondonLoansBank and has been serving for over 5 years. She is a psychology graduate from the University of Glasgow. Since she has keen interest in the finance field, she pursued a diploma course in banking and finance that led her to opt for her current career. She assists people choose the best loan based on their current financial situation and credit score. As Emma understands how people react to money problems, she gives them a helping hand to solve their financial complications.