If you suffer from poor credit, you may be wondering what options you have for obtaining a loan. Many people made mistakes in the past or suffered incidents and problems that have led to them being regarded as having a poor credit rating. There is even the fact that if you have never had a loan or used a credit card before you will be regarded as having a poor credit rating because there is no evidence on how you manage your credit. This means that many people hold a bad credit rating, and it doesn’t have anything to do with their ability to pay back a loan.
A mainstream lender or traditional finance company is unlikely to provide you with a loan if you have bad credit, but this isn’t to say that there are no options available for you to choose from. Even if you have poor credit, you will find that there are loan options which can help you to find a solution that meets your needs.
When it comes to the poor credit loan that most people are aware of at the moment, payday loans will probably be the first option that people think of. This is a style of loan that allows people with poor credit to obtain finance, but it should never be considered as being the best loan for poor credit. The amount of money that people have to pay back with a payday loan is exceptionally high due to the levels of interest.
There are hugely inflated APRs associated with payday loans, and if you are looking to find an affordable solution for your finance needs, this is not the solution that should be at the top of your list.
A guarantor loan will help you out
There is an argument to be said that a guarantor loan is best for poor credit, and if you are struggling to obtain a loan from traditional methods, this is the option that may be best for you. With the guarantor taking on responsibility to pay back the loan if you are unable to, the lending company is far more confident about getting their money back. This means that they will offer a loan at a lower APR, which means that it costs you a lot less than a loan for the same amount from a typical payday loan company.
Having poor credit is no barrier to obtaining a loan; you just need to find the option that is best for your needs.