Every now and then, we all face a financial issue that we just don’t have the money to cover. If you’ve managed to work up a small amount of savings, then maybe you’d happily dip into that to cover unexpected payments and surprise bills that your current account can’t manage. However, if you haven’t got a savings account or you’re not quite started on your savings journey, then unexpected expenses can come as a big inconvenience and it’s hard to know where to turn to, especially if your credit file is slightly less than great.
We all have reasons for being bad with money – maybe you didn’t get a good financial education growing up, maybe you took too many loans as a young adult and are still facing the repercussions or maybe you are a young adult and you just haven’t started on your credit journey yet. These are all fair reasons for having a poor credit history, but it doesn’t mean you should be cut off from accessing credit when you need it most.
So, what are your options for getting access to money fast without a good credit score?
Most people will be familiar with guarantor loans and how they work: a lender will assess your credit history and if they don’t feel they can lend to you based on your creditworthiness, they will require another person to act as a guarantor who will have to repay the loan if you fail to make the agreed repayments as outlined in your loan agreement.
However, it can be tricky to ask for family and friends to help you out in times of financial difficulty – as most people don’t even discuss their finances with their loved ones at the best of times, so asking for a helping hand might seem out of the question.
This is why it is possible to get a bad credit loan without a guarantor. Bad credit loans are essentially short term loans. You can make an application for a small amount of cash and, if your application is approved, you could receive the funds within minutes. You then repay the loan on your next payday – or over the next few paydays if you take out an instalment loan.
Bad credit loans differ from normal overdraft or credit card facilities because you won’t automatically be declined solely because of your credit score. Bad credit lenders will take multiple sources of information into account when they assess your loan application. And, even if you do get declined, you can always request that your application is manually looked at.
Most bad credit loans are available online, so you can apply any day of the year and get the funds on the same day. As you can often get a bad credit loan for any amount up to £1000, you should be able to cover most unexpected expenses without having to look for a secured loan or a guarantor loan. Online short term loans are accessible and flexible so that you can meet your financial commitments without relying on other people.
Before you apply for any kind of loan, you should always do some comparative research first. Find out if you are getting the cheapest loan and the most flexible loan to suit your circumstances. Clear and Fair compares bad credit loans so you can find a fast cash loan to suit your circumstances, and make sure that you’re not paying more than you need to on those odd occasions when you do have to borrow money.
However, it’s important to remember that bad credit loans are not a form of income – they are designed to help you bridge the gap between your paydays so that you don’t fall into arrears or get cut off from priority services.
Bad credit loans do accrue interest so you will always have to repay more than you borrow and therefore it needs to be a considered decision. Making your repayments late or failing to make your repayments at all can cause you serious money problems and can make credit harder to obtain in the future, so you should never apply for a loan if you don’t really need it or if you know you can’t afford it. Try and budget around the cashflow issue and in better months, consider putting some money away for future financial shortfalls.
There’s no shame in asking for advice from friends or dedicated debt advice services if you do feel like you’re struggling with your financial situation. Although you may not want to ask them to sign on as a guarantor for a loan, discussing your financial problems with friends can help alleviate some of the stress you might be feeling. Alternatively, you can speak to an impartial debt advice service such as StepChange who will advise you on the best course of action in your specific circumstances.
Financial management doesn’t come easy to everyone, so sometimes you might need a little helping hand in the way of a small bad credit loan to help you manage your cashflow. However, don’t forget that taking out more credit might make your situation worse, so make sure you tackle any previous debt and financial difficulty before applying for new loans.
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