If you’ve stumbled upon this article, it only means two simple things; first is that you have a bad credit rating, and second is that you need money and fast! But of course, with your current credit rating, how could you ever possibly get out of your sticky financial situation? Banks and other financial institutions rely heavily on a person’s credit score rating for them to grant a loan, so you might be close to impossible to approach these companies to get quick cash.
Loans for people with bad credit are very hard to come by, but it is not entirely impossible to get one. You could get loans for quick cash, but there are lenders who would charge you with a ludicrous amount of interest to pay back. You just have to be careful about where or who to get your loan from, especially if you have bad credit. Lucky for you, there are various firms that tend to grant online payday loans for bad credit, and they would not stump you on the representative annual percentage rate of interest they would charge.
Your Credit Rating Matters
People who have a bad credit rating either know they have such a rating because of their financial decisions or circumstances they choose to be in, or they do not know because of certain circumstances they are in. There are a lot of different factors that would comprise your credit rating. Missing on loan, credit card, debt, or mortgage repayments and/or actually being officially declared bankrupt are the top reasons why you would have a bad credit rating.
If you are the type of person who has never had the chance to start or even build up a credit line, then you are also in danger of having a bad credit rating, the same goes for people who are self-employed. Your credit rating tells possible lenders of your capacity to make repayments on loans they could potentially provide for you, that is why most people with bad credit ratings have a hard time taking out a loan. You could actually improve your bad credit rating, and an easy way to do that is to take out a loan for people with bad credit from TFS Loans or a similar service provider!
TFS Loans’ Bad Credit Loans
Securing a loan with TFS Loans is very easy, and the best part about it is that you would not have to pay high prices of interest that would only potentially make your current financial situation worse. Small-value loans from 1,000 to 4,500 only have a representative APR of 69.9% or as low as 48.9% for higher values. For loans amounting to 5,000 and as much as 10,000, you could enjoy a representative APR of only 39.9%.
If you plan to get a larger valued loan exceeding 10,000 up to a maximum of 15,000, you would only have a representative APR of 29.9%. It would be very easy to pay off as well because you have a choice of how long you want your loan period to be. So, you can base your loan period duration on how affordable the monthly repayments are and how much you have the capacity to pay it off vs how much you are willing to pay back in total.
Guarantors and Bad Credit Loans
The reason why TFS Loans can easily approve your application for a loan even if you have a bad credit rating is that they make use of a guarantor loan set-up. When you apply for a loan with them, you are required to apply with a guarantor, ideally someone you know, you can trust, and someone who has a good credit rating. If you want to take out higher-valued loans greater than 10,000, your guarantor should also prove that they are a homeowner.
Your guarantor’s credit rating will be the basis of your loan application, but you would still be responsible for paying for your monthly repayments until your loan (with interest!) is paid back. Your guarantor would only stand in paying for your monthly repayments should you, for any reason, fail to do so. So, in a way, there is always a guarantee that you will be making your monthly repayments in order for you to easily improve your credit rating. It would then be a private discussion between you and your guarantor on how you would pay off your debt to him or her. That is why it is very important to get someone that you really know and trust to back you up as a guarantor so that it would be easy to discuss terms should the worst happen.
Guarantor loans complaints surge
Guarantor loans were the most complained about products between October and December 2020, with over 10,000 cases, according to the latest data from the Financial Ombudsman Service (FOS)
We asked James Conroy marketing director of ReclaimExperts.co.uk for his thoughts on the recent report generated by the FOS.
James says: The Guarantor space is driven in the majority by Amigo Loans who are the biggest lender in the Guarantor market. Amigo has really suffered from the recent surge in complaints. Seemly, the majority of complaints have come via CMC’s(claim management companies), however, a number of complaints have been made directly by the consumer which you are able to do for free rather than paying circa 30% in fees.
From our own user engagement, we can see the traffic increase for the larger lenders like Amigo and Provident. Lenders like TFS Loans seem to have lent correctly and in line with the FCA guidelines.
