It is worth making sure, that before you take out a particular loan, you know all about it. It is also important to make sure that you know about other loans as well. Then you will be able to decide whether the loan works well for you. You need to match the best loan to your requirements. So, if you are not totally sure about how a bad credit loan works, then it is time to find out more before you then decide whether it will work for you.
What Bad Credit Loans are There?
There are few different types of bad credit loans and it is good to know about the types so that you can choose the one that suits your needs the best. There are payday loans, which are probably the most well-known and you can borrow up to £1,000 with these. They can be arranged quickly – sometimes within a few hours and even outside of normal banking hours at times as well. You might be bale to get the money within a few hours but you will need to repay it quickly, when you next get paid which could be just a few weeks or even days. You will also have to repay all of it at one go.
An instalment loan is very similar but you repay in instalments over a few months, which makes it easier to manage the repayments and be able to afford them, especially if you borrow a larger amount of money.
A guarantor loan allows you to borrow more money – usually up to £10,000 and this means that you will be able to buy more expensive items with it. However, as they will lend to you even if you do not have a good credit record, you will need to find a person with a good credit record that is willing to pay the repayments for you, if you miss them.
What Can I Use them for?
With these loans there are no restrictions with regards to what you buy with them that are specified by the lender. They will not mind what you spend the money on. However, as they lend you relatively small amounts of money, then this will restrict what you can buy with them. You also need to repay a payday loan very quickly and so you need make sure that you will have the money to repay, so really, they are designed for use in emergencies rather than just general use. With a guarantor loan, you will be able to get a lot more money but it will depend on whether you can find a guarantor which will be easier for some people than others. So, if you cannot find one then you will be restricted to just a small amount of money and that will influence what you buy with them.
So, although you can in theory, use bad credit loans to buy anything, you may be restricted by the fact that you will only be able to borrow a minimal amount of money. This means that you will not be able to buy anything at all but you will be able to use it for certain things. It is always wise though, to make sure that you compare the different loan types and compare them. This is because you will be able to find whether you will be getting good value for money. You need to think about what you need from a loan and then you will be able to work out whether you can get this from the bad credit loan or any other loan that you have looked in to.