Lenders report to credit reference agencies with respect to whether a payment has been made punctually each month. Missed and late payments make borrowing money far more difficult. However, there are several providers of small cash loans for people with poor credit that don’t make lending decisions on the basis of credit scoring. Whilst no credit check finance vastly increases the likelihood of approval, it also means that the lender faces a greater risk of default. Bad credit history loans cost more, but can provide a potential lifeline in the event of a financial emergency.
Small Cash Loans for People with Poor Credit
It is possible to get a credit union, pawnbroker or quick cash payday loans UK to help with unexpected bills. The high rate of interest means it should only be considered a short term loan. There are no restrictions in terms of what the money can be used for, but paying back the principal and any interest that has accrued will leave less money to pay the bills the month after. Never take out a bad credit history loan for an impulse purchase, only use it to cover essential bills when personal finances are a little tight.
Same Day Unsecured Loans from a Payday Lender
In order to qualify for a quick cash payday loan, the borrower will need to pass a set of eligibility criteria. He/she must be an American citizen, at least 18 years old, have a full-time income, have their own valid checking account and be able to provide 2 forms of identification. Those who are able to comply will be eligible for a small cash loan of up to $1,000. The monthly rate of interest is approximately 20-25%. The lender requires a postdated check for the balance plus any interest that is set to clear on payday.
Bad Credit History Loans from Credit Unions
In order to become eligible for a credit union loan, it is necessary to become a member. People join on the basis of a shared interest, such as working for the same company or living in a certain area. The high administrative costs, relative to the length and value of a small cash loan, means that the APR is almost identical to a quick cash payday loan. The advantage of borrowing money from a credit union is that they don’t operate for the purpose of profit and will show greater understanding in the event of money worries. They will also take greater time to assess whether this type of loan is affordable.
Pawn Shop Loans for People with Poor Credit
Unlike a quick cash payday loan, the customer will be expected to provide the lender with a source of collateral (gold, jewelry, electrical equipment or even a whole life insurance policy). Once the agent has assessed the value of the collateral, they will advise how much money can be borrowed. The APR on a pawnbroker loan is roughly the same as others, but the lending criteria are more relaxed. Failing to redeem the item will result in it being sold to recover any money that was borrowed.