What types of loans are there for people with bad credit?
The first type of loan is a straightforward and traditional personal loan for people with bad credit. These are often available on a fixed rate and with interest rates currently lower than they have been in years, the repayments can be attractive. With a personal loan you can typically borrow between £1000-£25,000.
This is an unsecured loan, so your credit rating might be an issue and you may be encouraged to take income protection to cover you in case you cannot meet the repayments. There are still lenders willing to do business with you, though, so get in touch with them today.
Another alternative is a guarantor loan, where you get a close friend or family member to guarantee they will repay the loans. Be aware that if you cannot make the payments then the lender has the right to go after your guarantor for the money, they essentially agree to pay back the loan if you can’t. So you should think about this point carefully. If you’re confident you can make the repayments, then a guarantor loan may be a perfect solution for you.
The homeowner loan is the last one on the list and it’s the one you should take most seriously as your home is used as security. Your home is at risk if you don’t keep up the repayments, but you may be able borrow a much larger amount. So if you’ve got a dream for a new business, this could set you on your way.