People in the UK are facing financial crises due to various issues, i.e. economic slowdown, unemployment and more. Life has become tougher and more and more people are facing bad credit issues. If you are a poor credit or zero credit customer then arranging funds from typical lenders and banks is almost impossible. However, there are reliable alternate sources from where you can easily avail bad credit loans without paying any extra fee.
Online Borrowing for Bad Credit Customers
There is no need to stand in queues outside the offices of traditional lending companies and banks. Whether you have a less than a perfect score or almost zero score, you can easily avail instant loans from any of the reliable online lenders in the UK. Online borrowing is a new phenomenon that is quick and hassle-free. Basically, there are 2 types of online funding options that bad credit customers can choose depending upon their requirements: secured financing and unsecured financing.
Secured Online Funding for Bad Credit Borrowers
Many online lending companies in the UK release instant funds only when you submit your valuable assets with them. They want security so that they don’t lose their money even when you default the availed loan. There are no lending risks involved, hence interest rates are quite lower and you can avail even a large amount of funds for a longer duration. Home equity and logbook loans are one of the examples of secured loans for bad credit.
Let’s have a quick look at the advantages and disadvantages of secured financing options for bad credit:
Advantages of Loans for Bad Credit with Collateral
- You can avail any amount from 500 pounds to 25,000 pounds, depending upon your asset’s worth
- Interest rates are surprisingly low
- Can be availed without passing any credit screening check
- You can apply online anytime from anywhere
- The availed money can be paid off in EMIs as per your comfort
- Tenure is usually longer i.e. 6 months to 5 years
- People with even very poor credit or zero credit scores can easily get the funds
- You can easily qualify for the funding
Disadvantages of Collateral Loans for Bad Credit
- You are required to pledge your asset
- Borrowing is risky. You may lose your asset in case of default
- Loan durations are usually longer means the total borrowing cost is higher and you are in debt for a long time.
Unsecured Online Bad Credit Loans
There are easy financing solutions that you can instantly avail online without submitting any collateral or guarantor. You are not required to pay any extra fee or deposit bad credit penalty. The online bad credit loans with no guarantee are risk-free funding options and advantageous to people who want to secure immediate funds without any obligations.
Let’s have a quick look at the advantages and disadvantages loans for bad credit with no collateral:
Advantages of Loans for Bad Credit without Collateral
- Get the instant approval and the required cash on the same day
- Flexible repayment schedules
- Completely risk-free as you don’t have to submit your asset against the debt
- Apply for a bad credit financing solution in 2 minutes
- No extra fee to be paid
- Chance to improve your credit score
Disadvantages of Bad Credit Loans with No Guarantee
- Interest rates are slightly higher as compared to the secured financing options
- Loan durations are shorter i.e., 3 months 2 years
- You have to pass certain basic criteria set by the online lender
- Defaulting a poor credit loan leads to more credit score problems
- Limited funding amounts
Both kinds of online bad credit funding options are easily available in the UK loan market. However, you have to be highly careful before applying for such loans. Yours single wrong step can put you under more debt or make you bankrupt. Don’t borrow a large amount of money that you don’t need or you can’t pay off.