If you have a bad credit rating and need extra money, it’s going to be hard to find a lender that’s going to approve a personal and business loan. The majority of lenders rely on a person’s credit rating to make a decision on whether or not to grant them the loan. If you are one of the very few who get lucky enough to get approved for a loan, you would be subject to very high interest which will make paying the money back even more difficult. In fact, this can sometimes put you in an even worse financial situation than before you took out the loan. But this is not always the case, so you really need to choose wisely and consider all of your options when choosing loans for people with bad credit. One loan provider you should consider is TFS Loans. They have a high approval rate and tailor their loans to suit those who make applications with them.
Low Representative APR
Compared to other kinds of loans and other financial providers, TFS Loans give out loans amounting to as small as only £1,000 and up to as much as £15,000. You can also get a similar amount of money by applying for a payday loan, but you would be faced with a much greater deal of interest which typically starts at 35.9%. By securing a guarantor loan with TFS Loans, the highest representative APR you would be faced with would be a maximum of 29.9%. Imagine a loan value of £1,000, you would only have to repay £1,317.36 if you are able to pay it back within a year, and a maximum of £2,042.64 if you pay it back with 36 months.
The reason why TFS Loans is able to give approval for loan applications from people with bad credit is that they require the security of a guarantor to ensure they get their money back. With guarantor loans, a person with a bad credit rating will apply for the loan together with a guarantor who has a good credit rating. The guarantor does not necessarily need to be a homeowner, but if you do want to get higher valued loans from £10,500 up to as much as £15,000, it would be better to apply with a guarantor who has a property title to his or her name. The main responsibility of the guarantor is to guarantee that money to pay back to the company in the event that you cannot pay it yourself or on time. When this happens, the agreement on how to pay back the money you owe your guarantor would already be between you and him or her. In essence, it would be impossible for you to miss on the repayments because of the set-up, so by the end of your loan term, you will also have an improved credit rating.
Flexible Repayment Schemes
With payday loans, you usually only have until the next payday or an average of 22 days for you to pay back the small value loan that you got. These are typically short term loans but come with incredibly high-interest rates of £24 on average per £100 you borrow. Because of the short term repayment scheme, a lot of people are trapped and end up not being able to pay it on time and only increase their interest rates or representative APRs with all the missed repayments. Requesting for a longer period of repayment period would only guarantee you of an even higher interest rate that would leave you financially incapacitated for the next years to come. With TFS Loans’ guarantor loans, you would be able to live with better financial freedom because of their flexible repayment schemes. The earliest time you could pay off your loan is for as long as a whole year, and the longest time is up to 60 months for higher value loans. This is dependent entirely on your financial capacities at a given period. If for example, you want a smaller monthly repayment expense, you can opt for the longer repayment scheme rather than a bigger monthly repayment with a shorter loan duration.