Regardless of whether the month is taking longer than a paycheck does, or there is a sudden emergency expense, a small loan to get extra cash can make a huge difference. The good news is that you can find various types of bad credit loans UK. However, you need to be careful when it comes to taking small loans with bad credit. This article discusses all you need to know about bad credit loans.
A payday lender is always a good option, especially if you have no credit history or a poor credit rating. After all, most payday lenders usually don’t do credit checks, and there is a unique application process that allows you to get the cash immediately.
Payday loans are considered to be short-term loans that are usually for small sums of money and can be due on the next payday. You can usually hear of them as the way to meet immediate financial needs until you are paid again.
However, you need to be careful with how you intend to use a payday loan. This is because these loans usually attract high interest rates, so you need to make sure that you can afford repaying the loan.
You can also find personal loans that are offered by online lenders. This is another great option for those with bad credit. Keep in mind that personal loans are also installment loans, meaning you can borrow a certain fixed amount of cash and pay it off with a predetermined number of payments.
You can also find some personal loans that are secured, so you may need collateral like a car or house. There are also some unsecured loans that need collateral.
There are also some personal loan lenders that are called peer-to-peer lenders. These lenders are some individual investors who can fund you rather than using traditional institutions in an attempt to have a better deal.
In most cases, if you have a better credit rating, the interest rate can be lower. It’s always a good idea to try getting a personal loan from online lenders because they sometimes offer more favorable terms than other types of loans.
Pawn shop loans
There is also a good chance that you may have heard about pawn shop loans. With a pawn shop loan, you need to bring in an item so that you can exchange it for a small loan that meets the value of the item.
But to get back your item, then you will need to repay this pawn shop loan before the expiry of the term. Remember that this term can vary, so you need to contact a pawn shop to understand their terms. Even then, you may need to pay expensive interest and fees. If you fail to repay the loan, it means the pawn shop can decide to keep your item and sell it. In most cases, there is no money from the sale that is given to you after the sale.