Is poor credit getting you down? Are you struggling to get a loan because of ancient financial history? When it comes to getting a loan, prepare to be judged. Banks and lending institutions will take a close look at your financial history before deciding whether to offer you a loan or not. If you have bad credit, you probably think that it automatically excludes you from the list of potential candidates for a cash loan, but don’t worry! It is possible for you to get a loan regardless of your credit score, and here’s how.
Loan Options for People with a Poor Credit Rating/Score
1. Apply for no credit check payday loans.
A payday loan is a short-term loan that is typically quick and easy to apply for online. While they are advertised as no credit check payday loans, it is important to remember that by law, lending institutions must carry out affordability assessments and consider your credit rating. However, because these loans are typically small and based on the premise that they are paid off by the next payday (or as per an agreed short-term loan contract), they are usually easier to get approval for than bank loans.
2. Get someone else to sign surety for your loan application.
Imagine that getting a loan approval was as easy as getting someone else to promise to pay your debts if you can’t. Well, that’s exactly what will happen if you find someone else (with a good credit rating) to co-sign or co-apply for a loan with you. The concept is that the co-signatory will carry the responsibility of the loan contract and it is their credit rating that the loan approval is based on.
3. Put up some form of collateral.
If you have property to use as collateral, you can apply for an equity loan. This type of loan works on quite a different loan model to no credit check payday loans. This is where a loan is taken out against the value of your property. It’s important to be careful with this type of loan as defaulting on it can result in losing your property.
4. Pawn shop loans.
Pawn shops offer loans as long as you have a valuable item to use as collateral. You can use a laptop, watch, jewellery, smartphone, and other valuable items. The collateral item is handed over and a set amount of cash is paid into your bank account (or in cash). If the loan is paid back as per the agreement, the collateral item is returned at the end of the loan period. There is quite a bit of risk involved in this type of loan. If you don’t pay back the loan or you default on the account, the item can be sold to “defray costs”.
5. Find a local credit union.
There are currently hundreds of credit unions operating in the UK. These are “local” banks run by members instead of shareholders. Because of the structure of these small banks, their fees are typically lower and so are their interest rates. The approval of loan applications is also based on more than just your credit rating, which means you have more chance of a loan approval with a credit union than with a regular bank.
If you have been denied a loan because of a poor credit score, don’t stress out. Consider all of your alternative loan options including no credit check payday loans which are growing in popularity in the UK. There’s a loan option out there for everyone – even those with bad credit. You just have to know where to look!