How to Secure a Loan with Bad Credit

There are a lot of factors that may affect a person’s credit rating. In fact, some may be just due to certain set-ups which you do not have control over such as self-employment or not being able to build a credit rating. But there are also those which you may have control over, but of course, your financial capacities and capabilities may not permit you to do so. If you have unpaid credit card balances on top of your mortgage payments and additional car loans or leasing monthly repayments, you are bound to miss on making payments on one or even two of your bills – no matter how much you want to pay it on time and in full. You would only end up having a bad credit rating, and it would be hard for you to get financial aids and services such as loaning and leasing. Well lucky for you, loans for people with bad credit are not impossible to secure especially with TFS Loans.

Payday Loans

This type of loan would only leave you paying back a lot of interest. You might get stuck and left with more payments to make because payday loan companies usually charge higher interest rates and even give you shorter periods of time to pay for the loans. Opting for payday loans would give you lesser financial freedom and management and leave you with more headaches and burden in the long run. Even if you are desperate for the money that you would be getting from the loan, you should not consider this given that there are more affordable options and financial institutions that would not take advantage of your current financial position.

Guarantor Loans

With TFS Loans, you would be able to get a loan even if you have a bad credit rating through guarantor loans. What will happen is that you must find a guarantor with a good credit rating to apply for the loan with you. What you have to agree on with your guarantor is that he or she would be signing off on the loan application and agree to the terms that he would be responsible for paying off your monthly loan repayments in the event that you would be unable to do so. With a guarantor loan, you would not get interest rates that are too high to pay off, and you could even spread out your repayments for much longer periods of time.

Loan Terms

With a guarantor loan through TFS Loans, you would be able to enjoy flexible repayment schemes that would fit your financial capability and capacity. If your guarantor is a tenant of his current residence, then you have the option to get a loan starting from £1,000 to as much as £5,000. However, if you guarantor is a homeowner, then you can opt to apply for larger loans exceeding £5,000 and as much as up to £15,000. The repayment period can be spread out into lengths of your choice, starting from 12 months and up to as long as 60 months for bigger value loans. But you have to understand that you may have smaller monthly repayments for longer repayment periods, but in the end, you would have a bigger total payable on top of your loan because of the yearly interest rate you are paying for.

Lower Interest

Payday loans typically have a representative APR ranging from 35.9% and could reach 1,304% APR if left unpaid. Imagine getting a loan of £500 and repaying it for the amount of £6,520! That is £6,000 more than the small amount that you initially loaned. That is why you should always look for better options when getting a loan. With guarantor loans, you would have a fixed representative APR of a maximum of 69.9% and a minimum of 29.9%, depending on the loan amount that you would be getting. But you would not get a representative APR higher than what you would be given upon the acceptance and processing of your loan. It would also not increase in value throughout the loan period because technically, you would not miss a repayment on a given month since you have a guarantor to make sure that it would not happen. With guarantor loans, your £6,500 loan would only total to £11,986.08 which you can repay for as long as 48 months. With that set-up, you would only have to make monthly repayments of just £249.71. Not only is it more affordable in the long term, but it is also much easier to pay-out compared to other loans.