Creative Lending: How To Get A Loan With Bad Credit

Payday Loan

What is a Payday Loan

A small un-secured loan at a high rate of interest for a short period, usually to be paid off within 31 days when your wages come through.

Will I qualify?

Qualifying is easy because there’s no credit check. So if you’ve had bad credit this may be ideal.

How much can I borrow?

Usual payday loans are anywhere from £1 – £1,000

How long can I borrow for?

Typically these loans are repaid in full within 31 days (by pay day), although you may have the option to roll over to the next month or take the money over 3 months with some lenders (not always a great idea considering the high interest you’ll pay).

What will it cost?

Payday loans cost anywhere from 1,000 – 4,000% apr

How quick is the cash?

Usually instant – Get online and apply and the cash can be in your account within minutes.

Logbook Loan

What is a logbook loan?

You hand over your cars logbook, they lend you the money and give it back when you’ve repaid it.

Will I qualify?

These loans are unique because they are available to almost anyone. NO CREDIT SCORE is needed. You just need to be the legal owner of the car and have no other outstanding finance on it.

How much can I borrow?

Logbook loans are available from £500 up to £50,000, but usually the maximum is limited to 50% of the cars value.

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How long can I borrow for?

Logbook loans are also short term but can last up to a year and a half, so if you’re looking for a cheaper alternative to a payday loan this might be the option.

What will it cost?

Typical rates for logbook loans are around 400% apr.

How quick is the cash?

This can take slightly longer to arrange than a payday loan done online, because the car needs valuing, paperwork needs to be signed, the cars logbook handing in, and a tracker needs to be placed on your car.

Logbook Loans vs. Payday Loans

– A logbook loan is secured on a vehicle, a payday loan is unsecured.

– A logbook loan can be taken over 1.5 years, a payday loan is usually repaid in one month.

– A logbook loan rate of interest is much more favourable than a payday loan.

– A logbook loan cannot usually be instant cash (although it’s still fast cash), conversely a payday loan can be in your account within minutes.

In summary, it really depends on what the borrowing is for, how much you need, and if you own a car with finance on or not. If you need the money immediately, and only want a small amount then maybe a payday loan is the answer. If you need to borrow a large amount and want to spread it over a longer term, maybe a logbook loan is right for you.

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