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BAD CREDIT LOANS IN THE UK

Due to bad credit history, an individual may fail to qualify for any credit facility. Loans offered to such individuals are referred to as bad credit loans.

These loans are considered as high risk due to the high default rate of the applicants. People with poor credit history often have a hard time finding loans. Bad credit lenders thus charge very representative rates as high as 99% for these loans.

Types of bad credit loans

  1. Personal loans

These are online loans that an applicant does not use their assets as security for the loan. Their rates are very high due to high risks that the creditor takes.

  1. Guarantor loans

Guarantor loans demand that an applicant provides a guarantor for the loan. Guarantors range from family, friends to colleagues. There are easily funded, unlike personal loans. These are good if you are looking for loans for bad credit

  1. Secured loans

Secured loans require that an applicant uses their assets to acquire the loan. These loans are very risky for the borrower as the creditor could repossess the assets to recover their funds in case of default.

  1. Peer to peer loans

These are loans that one could borrow from an individual rather than from a bank. These are very friendly loans.

  1. Payday loans bad credit

These payday loans bad credit are usually high in APR. They should only be taken out as a last resort. These are usually loans from £100 to £2000.

BAD CREDIT LOANS IN THE UK

The following are bad credit loans offered in the UK:

  1. 1st Class Loans
  • No fees, this service is 100% free
  • Loans from £100 to £5,000
  • Loan repayments from 3 months to 24 months
  • Have a large panel of lenders who specialize in loans for bad credit
  • Also, do no guarantor loans
  1. Buddy Loans Guarantor loan

These loans are characterized by:

  • Are friendly and has no fees.
  • Must have a guarantor.
  • A guarantor should be a homeowner or a tenant who has a good credit rating.
  • The loan amount ranges from 1,000 Pounds to 10,000 Pounds.
  • The representative fixed APR of 49.9%
  • Loan term ranges from 1 year to 5 years.
  • Minimum age is 18years.
  • A poor credit rating is accepted.
  • Eligible for UK residents.
  1. Bamboo personal loan

These loans are characterized by:

  • Must have a guarantor
  • The loan amount ranges from 1,000 Pounds to 8,000 Pounds.
  • The representative fixed APR of 69.9%
  • Loan term ranges from 1 year to 5 years.
  • Minimum age is 18years.
  • A poor credit rating is accepted.
  • Eligible for UK residents.
  1. George Banco Personal loan

These loans are characterized by:

  • Loan amount ranges from 1,000 Pounds to 5,000 Pounds.
  • The representative fixed APR of 79.9%
  • Loan term ranges from 1 year to 5 years.
  • Minimum age is 18years.
  • A poor credit rating is accepted.
  • Eligible for UK residents.
  1. Everyday Personal loan

These loans are characterized by:

  • The loan amount ranges from 1,000 Pounds to 15,000 Pounds.
  • The representative fixed APR of 99.9%
  • Loan term ranges from 2 years to 5 years.
  • Minimum age is 21years.
  • The minimum income is 15,000 Pounds.
  • A poor credit rating is accepted.
  • Eligible for UK residents.

Cons of loans for bad credit

  1. High-interest rates

Loans for bad credit often have very high-interest rates. They range from 49.9% to 99.9%. The highest interest rates are especially charged for the very bad credit loans that have no security.

  1. Risk of repossession of assets

Creditors have the authority to repossess an applicant’s assets once they default in their poor credit loans. This places a risk of losing personal assets to the applicant.

  1. Cost of fees

Loans for bad credit often have cost attached to them. These costs include arrangement fees, early repayment fees and bounced payment fees.

4.Guarantor ship

Some of these loans require that an individual has a guarantor. In some instances, it may be very difficult to get a guarantor at no cost as its high risk.