Borrowing Money with Bad Credit: What are Your Options?
By Money Desk
Tuesday, April 7, 2020.
It’s never nice to be denied a loan, especially when you need it for an emergency. Unfortunately, bad credit scores can be responsible for just that, irrespective of your current financial status. On the other hand, there are ways to get a loan approved instantly, even if you have bad credit and have also been denied by first-party banks and credit unions. As to what they are, let’s find out.
Bad Credit Payday Loans from Direct Lenders
Known as short term loans, bad credit loans, direct lender loans, payday loans and even online/offline bad credit loans, they are more or less all synonymous to the same concept, albeit with slight differences between some of them with respect to the platform, interest rates, policies, etc.
What they always do have in common, however, is the fact that these lenders provide small loans to people who need them, even if they have bad credit. However, due to the shady nature of payday loans which had once become a national financial problem, practicing caution is highly advised. The online loans for bad credit direct lenders like LoanPig provide, are now verified and regulated by the Financial Conduct Authority (FCA). The three golden rules of taking a bad credit loan are, therefore, as follows:
Compare your options to get the best possible interest rates
Only trust FCA approved direct lenders that show the interest and total amount payable in advance
Never miss a payment or the interest may become unmanageable
Peer-to-Peer Loans
As long as you are taking a loan from a known person or an acquaintance, it would be classified as a peer-to-peer, or P2P loan. It can be a friend, a relative or someone you know, but do keep in mind that illegal loan sharks will often pretend to be your friend in times of need.
There are authentic online P2P lenders as well, and they do offer flexible interest rates and tenures, but unless you see some sort of authentication from official authorities like the FCA for instance, there’s no guarantee as to what you might be getting into.
Secured Loans
A secured loan is given out by a lender when the lending party has something valuable to offer as collateral, in case they fail to pay the loan amount + interest in time. Home equity loans are a good long-term example of the concept, but it also applies to short term loans. The only good thing about secured loans is that you will only lose what you secure the loan against, but the bad news is that you can end up losing a car or even your home for a fraction of its original price!
Emergencies can strike at any time, especially during a time like this when the entire country is in panic from a viral outbreak. The condition will improve soon because the same has been observed in China itself, as the country is now recovering faster with each passing day. In the meanwhile, the contactless nature of bad credit online loans is a convenient and safe way to simultaneously manage financial emergencies and maintain the quarantine protocol.
