What Are Short Term Loans For Bad Credit?
When you're in dire need of temporary financial assistance, a short term loan is an ideal option for such scenarios. Short term loans can help you borrow fast cash to get out of the financial crisis without remaining in debt for prolonged periods. This type of loan has to be repaid typically within one year or a few months.
Lenders need some proof that the borrower can repay the loan in time. Besides a stable source of income, many lenders perform a credit check. If your credit history is not up to par, it affects your chances of getting a loan. Fortunately, most lenders provide short-term loans for people with bad credit.
Short term loans for bad credit are more flexible in terms of credit checks and can provide an alternative to fast cash. Another plus point is that you don't have to hand over an asset as collateral. Plus, repaying short term loans for bad credit timely can improve your credit score in the long run.
Can I Get a Short Term Loan with Bad Credit?
Whether or not you can get a short term loan with bad credit depends on the lender's terms and conditions and the eligibility criteria.
Bad credit history can decrease your chances of getting other loan types, such as personal loans, but for short term loans, loan providers evaluate other factors, too. As long as you fulfil the criteria, the most important factors, including eligible age, active bank account, and stable income, you can apply for a short term loan. Additionally, there are higher acceptance rates with bad credit than applying through a traditional lender with online lenders.
Short term loans for bad credit don't perform hard credit checks, but you'll have to be mindful of the interest rates that are slightly higher due to the risk the lender is taking in offering a loan instantly despite the bad credit.
How Do Bad Credit Ratings Affect My Short Term Loans Application?
Each credit transaction you make at any time reflects on your credit ratings. Your purchases, debts, and repayments improve or depreciate your credit score. Revenue agencies keep a record of your credit history, and this credit history is then evaluated by banks, credit unions, or lenders before accepting your application for any of their services, such as getting a new credit card or applying for a loan.
Your credit score can take a severe hit when you don't repay your debts on time, fall into bankruptcy, or lag in your mortgage payments. This "bad credit" can lower your chances of getting accepted for a loan the next time you need it.
How Can I Get a Short Term Loan For Bad Credit With FastPaydayLoans?
Using our platform, you can easily apply for a short-term loan with bad credit and receive an instant decision today!
Step 1: Submit the Application Form
Fill out the application form that asks for basic information such as personal and banking details within minutes. This information lets lenders determine the amount they can lend along with interest rates and charges.
Step 2: Accept an Offer
Our partnered lenders will make an instant decision based on your application within minutes. The lender may ask you to submit any additional information required and sign the deal.
Step 3: Receive the Deposit
You'll receive the loan in the bank account entered in your application form. The process is quick, and in most cases, the funds are transferred by the lender within 1-2 days.
Advantages & Disadvantages of Short Term Loans For Bad Credit
Before opting for any financial assistance that puts you in debt, you'd want to know the good and bad sides.
- Without physically visiting multiple traditional lenders, you can apply for short-term loans from UK direct lenders via an online broker. The entire application process is online and can be filled in and submitted within minutes.
- Where traditional lenders and other loan types take days and sometimes weeks to process, borrowing money with a short term loan through an online lender guarantees short turnaround times. The process is quick from application to approval, and you can get the deposit the same day or the next day.
- Some loans can only be borrowed for specific purposes, which restricts where and when you can spend the money. On the other hand, there is no such restriction with short term loans. How you spend the money is entirely up to you. However, it is advisable to borrow money only in a financial emergency.
Flexible Borrowing Range
- Short term loans have a flexible borrowing range. You can borrow any amount between £100 to £5000. The money you can borrow may depend on your credit score or the income proof you provide.
Approvals Despite Bad Credit
- A major drawback of bad credit is that it drastically lowers your chances of getting approval to borrow a loan. Short term loans for bad credit are a solution to this problem because they're specifically designed for bad credit holders, and online lenders offering these loans have higher acceptance rates.
- One thing you need to look into before signing an agreement for a short term loan is the interest rates and charges. Short-term loans can be expensive at times because of the immediate deposit after approval, especially if you have a poor credit history. Apply through an online broker to check different offers and select the best one.
Short and Consistent Repayments
- Short term loans are for a temporary financial crisis, so they also need to be repaid quickly. Generally, you'll need to repay a short term loan within a year and make regular weekly or monthly payments. Delaying the repayment can increase the interest rates and charges with time.
How Do I Improve My Credit Score?
If you have a bad credit score or want to hit the above-average mark, there are several ways you can improve your credit rating over time.
Keep an Eye on Your Credit Report
- Knowing where you stand on your credit report is the first step to knowing where you stand and how much effort you need to put into improving your credit score. Plus, who knows, there might be an error somewhere negatively impacting your credit report. You can receive an annual credit report without any charges from any of the three CRAs.
- One of the major factors badly affecting credit history is missing out on repayment deadlines. Not only are you building up the interest charges, but your credit scores go down as well. Check the deadlines for any repayments, such as loan repayments, credit card bills, mortgage payments, etc., and make sure to repay them timely.
Maintain Credit Balance
- Your credit limit may be £10,000, but you don't want to spend it all if you want a good credit score. Credit reference agencies keep a strict check and balance on how much of your credit limit you're spending. Reaching the borderline comes off as a bad money handling habit and brings down credit scores. Rather than reaching your available limit, maintain controlled credit spending to improve your credit score.
Pay Off Debts
- You can repay the loans you've recently borrowed on time, and it won't make much difference if you have outstanding debt. Besides repayments, pay off your previous debts simultaneously until it reaches zero outstanding balance to attain a good credit score.
Frequently Asked Questions
How much can I get with short term loans for bad credit?
By applying for short term loans for bad credit with Fast Payday Loans, you can get fast cash anywhere between £100 to £5000. The lender will also consider your repayment capability from your application and lend money accordingly.
Will a bank give you a loan with a 500 credit score?
Almost every traditional creditor, including banks, requires a good credit score, i.e., above 600, to accept a loan request. While a loan request with a 500 credit score won't be accepted by banks, you can apply for a short term loan for bad credit through an online broker.
How do I qualify for a short term loan with bad credit?
You need to fulfil the basic criteria to apply for a short term loan with bad credit. This includes:
- Above 18 years old and a UK resident.
- Authentic information, including contact details.
- Valid bank account to receive the deposit and repay the loan.
- Proof of employment or regular income.
Can I get a short term loan for bad credit with no credit checks?
It’s not possible to get a loan without a credit check. Loan providers need to go over your credit history to decide whether you can repay the loan.
Are short term bad credit loans more expensive?
Short term bad credit loans have high-interest rates and charges due to their urgency. Although, the rates differ as well depending on your credit ratings. A lender will check your credit history and correspondingly make the offer, including interest rates and additional charges.