If you have a poor credit record then you might think that you have no options when it comes to borrowing. However, there are options for you but some of them are much more favourable than others. A few examples are discussed below.
– Borrow from friends and family
– Logbook loan
– Payday loan
Borrow from friends and family
Borrowing from friends and family can be a cheaper option that others, assuming they will lend to you for free or at a low cost. It does assume, of course, that you have friends and family that have enough money to lend to you and that they are willing to do so. It is worth thinking it through though, before you ask.
Borrowing like this can sometimes cause tensions between you are the person you borrow from as well as possibly with others as well. If they want the money back before you can afford to repay it or they struggle for money as a result of lending to you this could be difficult for them and they may but stress on you as well. There may also be jealousy from other family members or friends if they ask to borrow and there is no money available for them.
A logbook loan is a loan that you take out with your vehicle as collateral. The company will look at your vehicle and work out what it is worth and then take away the value of any other loans you have against it and lend you some money based on the remaining value. You will then repay in instalments. This sounds similar to any car loan and it carries the same risks. Using your vehicle as collateral is risky. It means that if you miss a repayment then the lender can take the vehicle. If you use the vehicle for work and have no other means of getting there then it could end up with you losing your job. This is a big risk and you have to decide whether it is a risk that you want to take.
A payday loan is a short term loan which is available to those with a poor credit record as no credit check is done. It is usually arranged very quickly and therefore it is often possible to get the money the same day. The loans tend need to be repaid in a lump sum when you get paid; hence the name. Although these have a reputation of being very expensive, they are now regulated and therefore have limits on how much they can charge.
It is always wise to compare the different types of loans when you are considering taking one out so that you can see what is available and what is most likely to work for you. It can be tricky to take the time to do this when you are panicking about getting money in a hurry However, if you do not do any research you could end up getting a loan that will cost you much more than you need to pay. So it is worth taking some time to think about it. Once you decide on the type of loan that you want, then you should compare the different lenders in this category to see which will be the best for you. It is worth looking at the prices to see which will cost you the least thinking about both the cost of the loan in interest and fees and how much the late repayment fees will be if you have to pay those as well. Also consider the reputation of the lender and whether you feel happy using them. It can also be good to see what their customer services is like as you may want to contact them if you get into difficulties and it can be reassuring to know that there will be someone there to help you if this does happen. It can take a while to get all of this information but it is worth it if it means that you save money and choose a lender that you trust and that will help you if you need it.