When struggling with your finances, it can seem like an impossible task to get hold of the finances that you need when faced with a financial emergency. However, this is not the case. To help you get started on finding a safe loan, we will be providing you with some insight into the several different loan options that are available to you even with poor credit.
Understanding Your Credit Score
Before applying for a loan of any kind, you must understand your credit score and the impact that it can have on your loan application. By following the Fico scale used by the three main reporting bodies, you can determine whether the line of credit that you currently have is a positive one or not. From there, you can begin to assess the loan types that are available to you.
Understanding Secured And Unsecured Loans
When looking at the different loans available, you should first consider the differences in both secured and unsecured loans. A secured loan requires valuables such as a car or a home to be put up as security to act as security should you be unable to meet these repayments. The most common forms of secured loans are home mortgages.
An unsecured loan is a loan amount you can borrow directly from a lender without any need for security. The most common form of an unsecured loan is a payday or short-term loan. These are short loans that can be paid off either by next payday or in general to make it stand out. In the long run.
What Are Guarantor Loans?
A guarantor loan is a loan that is used by those suffering from poor credit and provides an extra level of protection as a result. These guarantor loans are different from payday loans as there is an extra level of protection. With guarantor loans, you have someone else sign for the loan along with you to make sure that all repayments are met should the original borrower be unable to pay back the loan amount. This is commonly used by those that have an extremely poor line of credit as it provides additional protection to the lender should they default on payments.
How Can They Provide You With Secure Finance Options?
When struggling with poor credit, you want to make sure that your lender is as secure as possible. For this to be achieved, it is important to look at the FCA registry and ensure that they are a part of this. If they have been registered with the FCA, you are then protected under regulation and can make sure you are getting the funds you need from a reliable source at this time.
With this in mind, there are several ways that you can guarantee a safe loan with an affordable APR that will have a minimal effect on your credit score when paid back in full. Where will you be starting when finding your chosen lender.
Related content from StrategyDriven