Bad Credit Loans: Who Is The Best Lender For Your Situation?

Updated on 31st of May 2019

You need cash right away; it is that direct. Maybe a big expense has suddenly popped up, need to clear a bill, relocate for a job, or take advantage of a sweet deal that just went through. If the amount you have is not ample, you will have to get cash from somewhere urgently. Think bad credit loans. If your credit score is poor, securing cash from conventional organizations such as banks will be an uphill task. Even those in good rapport with their financial institutions still need to follow lengthy procedures that can take days or even months before securing cash. The solution is bad credit loans and short-term lenders. In the UK, 4 in 10 adults do not have more than £500 in savings. But finding yourself in such a situation should not be a reason to get worried. There are many lenders out there who are willing to loan you. Besides, you can also grow from the situation and march to financial freedom. This post is a comparison of top bad credit loans and short-term lenders.

The interest rates

When you set out looking for bad credit loans or short term lenders, it is important to appreciate that the interest rates will always be higher compared to those of conventional banks. Because you are considered a high-risk party for having a very low credit score, the lender only takes the risk by charging a higher interest rate. Drafty has a representative APR of 89.7% while Savvy charges 234.8% APR. Here are other APRs from other companies. QuickQuid: Fixed interest rate: 292% interest per annum and representative APR of 1300.5%. Lolly: Lending rates by the company vary ranging from 49.9% to a maximum APR of 1294.1%. Sunny: Fixed interest rate of 292% pa and Representative APR of 1281%.

Fast loan processing

When many people set out looking for short-term and bad credit loans, they are already in a fix. For example, you want to relocate, cater for urgent medical bills, or take advantage of a deal that came through too fast. Therefore, you need a credit provider who can process the loan as fast as possible. Sunny, Lolly, Savvy and MoneySupermarket process their loans in minutes. Once the selected company indicates you are eligible, it should take less than 24 hours to get the cash in your bank account.

The flexibility of loan repayment

One risk that comes with some of the short-term lenders is inflexibility of payment schedules. For example, if you took a short loan and want to pay in six months, it is important to check carefully to avoid getting penalized for paying the loan early. Sunny and Drafty do not charge clients for paying their loans early. Indeed, they encourage users to pay early to get lower interest rates. In the case of late repayment, most companies are fast to slap borrowers with a hefty interest. However, others such as Drafty are more understanding and reach you to get everything back on the repayment track before attaching a penalty.

Customer support and financial advice

While it is true that most bad credit loans and short credit and short-term loan companies are in business, it is how they treat clients that help set them apart. A good company should be concerned about its clients and work on helping them run to financial freedom. Myjar, Oakam, and Savvy have a highly responsive support that will promptly sort every issue you might have with the loan, calculation, or clarification. Most of the companies such as Sunny have multiple lines of communication, knowledge base, and personalized support on financial matters. You will never feel alone after taking a loan from them. Here, you want a company that understands clients and walks with them until they clear the loans.

The final take

How effectively you go through a bad credit or short credit loan depends on the lender of choice. The main focus should be selecting the lender who is not simply driven by the need to optimize profits. Rather, you should target a versatile company that is willing to assist you to emerge a better financial manager.