How to Get a Loan When Your Credit is Bad

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If you have CCJs, poor credit or have missed a few payments, it may seem nearly impossible to get finance.  Many lenders will credit check you and automatically reject you based on your past credit history, which in turn leads to worse credit as the search is recorded and the rejection goes on file.  However, you may be pleased to learn that there is a solution – and that is to apply for a loan which does not need a credit check.

There are several types of loans for which you can be accepted without a credit check.  Firstly there are payday loans, which are short term loans designed to tide you over from payday to payday.  Payday loans are usually for around £80-£800.  Most payday loans companies won’t credit check you so long as you meet their criteria for a loan.  Usually this means you should be in employment, earning a certain amount each month usually around £750 and have a debit card with which the loan can be repaid.  These loans are only short term solutions and are usually for a maximum of 60 days.

If you have a relatively new vehicle which is clear of finance you may be able to get a log book loan.  A logbook loan is a loan secured against your cars documents (form V5 often known as a logbook).  You do not have to hand the car over; you keep the use of the car but release some of the equity in it to secure the loan.  As the loan is secured on the vehicles paperwork you do not need to be credit checked in order to get this type of loan.  Log Book Loans are available for between £100 and £50,000 and how much you can borrow depends on the make, model and condition of your car.  Usually in order to get a logbook loan, you need to be the registered and legal keeper of the vehicle; the vehicle should be under ten years old and free or almost free of finance.  Some lenders require that the vehicle should have a current MOT and tax in order to lend.  Logbook loans are for a longer period than payday loans – usually up to two years.

Doorstep lenders can offer cash loans of up to around £500 which are available to just about everyone – even those who are unemployed and on benefits.  Doorstep lenders are specialist loan companies who specialise in high risk cases – which means they can offer credit to just about everyone.  Loans are handled by local agents who call at your address to collect the payments each week.  These loans are done entirely in cash, the repayments are fixed and the agent offers a convenient collection service for repayments. These loans can be repaid over up to a year.

Lastly if you need to borrow more than £500, then a guarantor loan is a good option for you.  These loans which can be up to £5000 or so, require you to have a guarantor who will guarantee you are good for the loan.  In the event that you are unable to repay the loan, the guarantor will take over.  Finding a guarantor is not always easy, but a relative or close friend may be willing to help.  Generally they have to be over 23, a homeowner and to have good credit. 

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