If you have a poor credit rating then you will find it difficult to borrow money. Conventional lenders will tend to avoid lending to anyone with a poor credit rating and this means that if you do need money you will need to look elsewhere. While there are a few options, small loans, could be one that will work well. These types of loans are regulated, so they have to charge reasonably and although they will be more expensive than conventional loans, due to the risk the lender is taking, they are not allowed to charge extortionate amounts and have to charge within their own terms and conditions. This can make them a favourable alternative to loan sharks and other unregulated lenders.
Finding small loans for bad credit may be fairly simple as you may see advertisements for companies that lend small amounts of money and decide that you will just get in touch with them by telephoning or using their websites. This can be an easy and convenient way to get some cash quickly, but just because you have heard of the company, as they advertise, does not mean that they are the best one to go with.
Cost – Ideally you want to use a company that will charge you a low price but also gives you good value for money. They are some important factors that you need to look out for with regards to their cost
Representative Example: £400 borrowed for 90 days. Total amount repayable is £561.92 in 3 monthly instalments of £187.31. Interest charged is £161.92, interest rate 161.9% (variable). Representative 305.9% APR. We are a broker not a lender. We don't charge fees. We don't sell your personal information.
As with all lenders, they will charge for lending you money. This may just come in interest payments or there may be a fee or charge as well. They should tell you how much this is, with many having a calculator on their website, where you can put in the amount you want to borrow and for how long and they will let you know how much you will have to repay in full. However, it is worth noting details of their late repayment fees and any other charges too. These can usually be found in their terms and conditions rather than on their website or it could be easier to speak to their customer services department to find out for sure.
Repayment Terms – it is important to make sure that you take on a cash loan that you can afford to repay. The repayment terms will differ between different loans and so it is good to look at a few and consider how you would repay them. Some will expect one repayment which will cover the money you borrowed and the interest and fees all in one go at your next pay day. Others will allow you to repay in instalments. It is worth thinking about how you will pay for the loan and also how you will manage once you are making repayments. You may be able to afford that lump sum when you get paid, but will you also manage your other expenses and will you be able to makes end meet all the way until you next get paid? If you are not sure, then it is worth looking at bank statements and thinking back to how you have been doing recently. If you have been struggling, then you will need to consider smaller repayments over a longer term, but also consider how you will cover those costs. You may need to find more money to pay them, perhaps by spending less or earning more. It is worth exploring these to work out which will be best for you and how you will manage them.
Other Factors – there may also be other factors that may influence your choice of lender. Consider whether their reputation is important to you. You may rather go with one that you have heard of. You might want to speak to other people about their experience of lenders and see whether they can offer any help with regards to which to use and which to avoid. You may also want to take a look at some online reviews or comments about the lender to see what sort of reputation they have.
Once you have established what you are looking for you need to search lenders to find the right one. One easy way of doing this is to use Omacl which is a company that searches for you. You can let them know how much you want to borrow, even as low as £200, and they will send you the cheapest lenders details. This will enable you to easily save money and you will not need to do so much research.