Bad Credit Loans

Alternatives to Bad Credit Loans: Which Is Best for you?

When it comes to borrowing money, there are plenty of options out there. However, successfully applying for a loan can prove difficult if you have a bad credit score or poor credit history, and you may need to apply for a Bad Credit Loan or a similar borrowing option.

If you’re wondering what to do after being refused a loan, take a look at these alternatives to a Bad Credit Loan to discover which is the best borrowing option for you.

Credit Unions & Budgeting Loans

If you’re considering your borrowing options, it may be worth researching if you’d be eligible for a credit union near you. These non-profit organisations are often established in communities and organisations to assist members financially and work similarly to a loan. Some benefits of using a credit union as an alternative to a bad credit loan include a capped rate of interest and no hidden charges or penalties for early repayment. However, you should be aware that the majority of credit unions require members to save over an agreed amount of time before being eligible to borrow money.

If you’re struggling financially and need a solution for borrowing money, you could also apply for a budgeting loan from the Social Fund. These are usually interest-free and applicable for people on low income to help pay for necessities such as furniture, household appliances, clothing, living expenses and home repair.

Short-term Loans

Short term loans usually have a lending term of between 4 weeks and 6 months. A short term loan can be beneficial if you require a smaller amount of money to regain financial stability or pay for an unexpected cost. They operate similarly to payday loans, although repayments can be made over a longer period of time.

Pay Day Loans

Although you should seriously consider all other borrowing options before applying for a payday loan, they can prove beneficial for those who struggle to borrow money elsewhere. Payday loans allow customers to borrow small amounts of money ranging from around £80 to £500 to be repaid within the month or on your next ‘payday’.

Due to high levels of interest, payday loans can prove to be a very expensive borrowing option, and you may run the risk of needing to borrow again in order to repay the loan amount. This spiral can soon lead to severe financial difficulties, so make sure to explore all your options.

Doorstep Lending

Doorstep lending can also prove to be an expensive alternative to a Bad Credit Loan. Also known as Home Credit, doorstep lending is provided by companies who collect the repayments from your home on a weekly or bi-weekly basis. You should consider all options before deciding on a Home Credit Loan and should ensure that the lender is authorised by the Financial Conduct Authority (FCA).

Do not borrow money from loan sharks or anyone who arrives at your home unannounced and offers you money as this is illegal.

Pawnbrokers

Borrowing money from a Pawnbrokers is another alternative and allows you to borrow money without a good credit score. However, you may be charged a high level of interest and risk losing the jewellery or valuable item that you’ve used for security if you’re unable to make the repayments.

Before pawning your belongings, please check that the company is a member of the National Pawnbrokers Association to ensure that they meet the trade standards.

Guarantor or Joint Loans

If you are able to gain the support of a partner or family member, you may consider applying for a guarantor loan. These can potentially allow you to borrow money even with a poor credit history, as long as you have someone to guarantee the repayment. However, failure to repay can cause financial difficulties for you and your guarantor who will be expected to make the payment.

Joint Loans are also a possible borrowing option.  These are usually secured loans and require you and your loan partner to take shared responsibility for the loan.  However, this can cause issues if one of you is unable to repay the loan for whatever reason, as both of you will be equally liable for 100% of the loan rather than just your share.

Why Choose a Bad Credit Loan from Evolution Money

If you’re considering borrowing money then choosing a flexible bad credit loan from Evolution Money may be the best option for you in comparison to the above alternatives. Our specifically designed loans are ideal for customers with a poor credit history so you may still be eligible even if you’ve been refused a loan in the past.

Unlike credit unions and budgeting loans, customers can apply for a bad credit loan at any time with our straightforward loans process. All we ask is that you’re aged 21 or over, own your own home and live in the UK.

If you pass our affordability check and prove able to make the monthly repayments from your regular income, then you may be able to borrow £5,000 to £50,000 and pay it back over an agreed time period of 1 to 20 years.

Use your Bad Credit Loan to consolidate debts, pay for your special wedding day, finance your new vehicle or add value to your property.

Call 0161 814 9158 today to speak to one of our friendly and experienced secured loans experts to find out more about applying for a Bad Credit Loan.

Please note before making an application that all of our loans are secured. Failure to make payments on time and in full could potentially result in the repossession of your property