A bad credit score can have you worrying that you’ll never access a loan during emergencies. However, various types of bad credit payday loans in the UK exist to help people with bad credit scores stay on top of their finances before their next paycheck. You may need to be prepared to pay the higher interest rates associated with these loans. Alternatively, their rates, terms, and conditions tend to differ by lenders. Hence it may pay to research and compare multiple lenders before you pick one. And by submitting your information through reputable brokers such as PaydayLoansUK, you can connect with a lender who can approve any of your bad credit payday loans as soon as the next day.
What Causes a Bad Credit Score?
If you’ve ever been turned down for a loan, it’s only natural to question the probable reasons for that. Alternatively, click here to connect with a lender offering bad credit payday loans in the UK through PaydayLoansUK. They don’t discriminate against borrowers due to bad credit scores.
A bad credit score can be a result of negative influences on your credit report, including defaults, late payments, bankruptcy, or county court judgments. Here are some common causes of a poor credit score:
Falling off Your Credit Arrangement
When you miss a payment, make late payments or pay lower than what is required by your credit arrangement, it all counts as a poor credit history. As time goes by, it adds up, and it will result in credit reference agencies classifying your credit score as poor or very poor.
Declaring bankruptcy significantly affects your credit score. Your credit score is also affected when you take an Individual Voluntary Arrangement (IVA) – a repayment arrangement made between a lender and a borrower when the borrower cannot pay off their loan.
Selecting the Wrong Credit Card
Choosing the wrong credit card can have you falling behind your repayments because its credit limit, interest rates, and fees will be well below your balance limit. Credit reference agencies typically use these factors to determine your score. Therefore, you may want to pick a card that works for your situation.
Despite keeping your rating in excellent condition, someone else might compromise your credit cards by running big bills, which undoubtedly destroys your credit score. You may want to protect your cards from fraud by taking necessary security measures, for example, by canceling your cards in case of unauthorized transactions.
No Credit History
When you have never taken out any loan or a credit card, credit reference agencies have little information to use to determine whether you will pay off the loan in a timely and reliable manner.
Types of Bad Credit Payday Loans to Get in the UK
Now that you know the probable reasons for a bad credit score, it’s helpful to find out the kind of payday loans you can get if you have a bad credit score. These loans include:
These types require you to put your car, home, or other valuable assets as collateral to access them. You risk losing the collateral should you fall behind on repayments. Secured loans tend to have better rates or higher limits than other types of loans for bad credit because the collateral you put forward minimizes risk for the lender.
They allow someone else, mostly a relative promise to repay your loan should you fail to do so. When you find a guarantor with a good credit history, you can get a bad credit loan with a higher limit or better rates. However, your guarantor can lose their assets, such as their car, when you fail to repay the loans.
Unsecured loans may sound like a perfect solution because you don’t have to put forward collateral as security, and if you were to default no capital would be seized. However, these loans tend to have unfavorable interest rates, and their limits are quite low. Nevertheless, if you have a below-average credit score, it is close to impossible to get one. The lender can also file a lawsuit against you to collect the payment should you default them.
Advantages of Taking a Bad Credit Payday Loan in the UK
Available for an Individual with Bad Credit
Individuals with a poor credit history usually struggle to borrow money, especially because most traditional lenders reject their applications because they find them “extremely high-risk” borrowers. However, with bad credit payday loans, such borrowers can borrow funds for emergencies. Payday loan providers usually perform soft or affordable checks and have compensated for the high risk by levying higher rates than other lenders.
Can Improve Credit Score
When paid back on time, these loans can have you set your credit score in order. And when you continue repaying them on time, it improves your credit scores and you can access even better funds in the future.
Easy to Apply
In most instances, applying for a bad credit payday loan typically involves completing and submitting your details online and from anywhere. There are no paperwork or hassles associated, as with the traditional process.
How to Connect with Bad Credit Payday Loans Lenders in the UK Through PaydayLoansUK
Submitting your request for a loan through a reputable credit broker like PaydayLoansUK is a better alternative to direct lenders. You don’t need to move from one lender to another, which is only tiring and can hurt your credit score.
PaydayLoansUK allows you to submit a single initial request from where you can compare offers from responding lenders. They make the process of securing a loan convenient by matching you with a list of lenders offering payday loans for bad credit. Here’s how you can connect with a lender:
Submit your details:
Give all the necessary personal and contact information that will help them match you with a lender.
The lenders will review your information, and when they find you eligible, they will approve your request as soon as the next business day. They will send you a quote containing the loan amount and the terms and conditions of the loan.
Expect to get the loan soon after.