When you need to find out where to borrow money with bad credit it can seem like a very difficult challenge if you do not know where to start looking. Fortunately there are many specialist loan companies that offer products specifically aimed at people with bad credit ratings. Not having good credit will certainly be a problem with most of the mainstream lenders who are providing long term unsecured loans. To be reasonably sure of getting their money back over an extended period of time, they will set the bar quite high in terms of the credit record of the people they are prepared to lend to.
While some companies choose to offer ordinary unsecured personal loans to people with a poor credit history too, they are able to do this by charging the people they do lend to much more in interest. For these loan companies, their chances of losing money are that much higher, so they need to recoup a lot more from each loan to compensate. The irony is that people who have had problems and may perhaps struggle to keep up with repayments end up paying more than someone who can manage the repayments relatively easily.
However, standard personal loans are not the only sort of borrowing available, and there are a couple of options for borrowing money which do not depend on having a perfect credit score. For larger amounts of money, the only way to get round a bad credit rating is to use a homeowner secured loan. What this does is secure the loan against your home, which gives the lender the security they need in order to lend you the money.
This provides the lender with the reassurance of knowing that if you do turn out to be someone who does not keep up with repayments, they have the option of having your house sold off in order to reclaim the money you owe them. This is a very real possibility, so secured loans should not be entered into lightly. In the right circumstances, however, secured loans are a way of getting access to quite substantial amounts of lending, even if your credit record shows problems.
People often borrow money to solve problems of personal debt, and this is usually in the form of a debt consolidation loan. While many consolidation loans are unsecured, there are companies that will offer secured debt consolidation as a way of enabling those who would not pass a credit check to access such a loan.
At the other end of the borrowing spectrum there are payday loans, which again are often available to people with bad credit. A payday loan, or cash advance, is always for a relatively small amount of money, and for a very short period of time. Many of the lenders do not worry about your credit rating because of the short term nature of the loan. You will need to have a steady income to get a payday loan, and the lender just wants to know that you will have enough money coming in from the next time you get paid to pay off their loan. So they are more concerned with checking your employment status than your credit history.
Payday loans are without doubt the fastest way to borrow money. Using a good online direct lender, it is now possible to have cash in your bank account on the same day as you apply. While payday loans can be an extremely useful resource in the right circumstances, it is important to remember that they are not a solution to debt or ongoing money shortages. Use them for one-off unexpected expenses only, or risk getting into more and more debt.
Whether you are looking for a payday lender, consolidation loan or a homeowner secured loan, you should always approach at least two or three companies, as rates and charges vary a lot. There are many companies to choose from in both the US and the UK, and it is important to ensure that you find established and reputable organisations to deal with. There are unfortunately lenders out there that will try to steer you into arrangements that make the most profit for them, rather than finding what is right for you or what you can really afford.
Find reviews and recommendations for US and UK lenders for homeowner secured loans and direct payday loans. K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His website offers free, unbiased advice on a range of debt related issues, including UK IVAs, bankruptcy, budgeting and credit card settlement.