A bad credit score is often the reason to get a required loan. Finding such loan which will not only suit your needs but also offered at competitive terms is difficult. Traditionally Money lenders are required to check credit score to determine the customers’ ability to repay the respective loans, and on the basis of which they decide whom they can lend to. Bad credit score essentially represents a risk involved in lending the money and probability of non-repayment of the loan money. But this system makes it harder for people with poor or bad credit score to borrow money. 
 
In modern days it is found that people have the bad credit score for a variety of reasons and such people may need quick access to money in times of emergencies or any short term necessity. That is why many direct lenders have introduced loans that will match the needs of people with bad or poor credit score and giving them access to short term borrowings. Lenders have various criteria based on which they assess the different applications of the loans apart from credit score, such as specific employment, alternative income sources, etc.
 
These loans have a simple and quick application process. 
 

Pre-requisites to an application for a bad credit loan?

Many lenders cross-check the information you have provided them in your application form. There are some pre-requisites for your loan to be approved; you need to have an employment, your age must be 18 years or above and have a working bank account. 
 

Types of loans

 
People with bad credit score can find different short term loans suitable to their needs and repayment ability. Various loans offered may include bad credit loans, same day loans, payday loans direct lender, and bad credit payday loans with guaranteed approval in the UK.
 

Do bad credit loans have credit checks?

 
A credit check will always be performed for each application for the loan. Lenders have the authority to check the credit score and have to follow guidelines of Financial Conduct Authority guidelines. In the case of short term loans soft credit search might be done, which does not affect your credit score if your loan application is declined. This can help you to search for more number of loans without worrying about applications being turned down. 
 

How much can be borrowed? 

 
Anyone can find themselves in an unexpected situation of emergency when they need extra funds. In such situations, you need quick approval of your loan and immediate access to the cash. The time required to get approval for short term loan depends upon how much you want to borrow and for how long you want to borrow it. A small amount of loan is often granted quickly. The interest rates are also higher for these loans than the traditional form of a loan.
Many direct lenders now offer bad credit loans online making the process faster than ever. It has to be kept in mind by customers that not all applications get approval. Sufficient background check is done by lenders based on the information you have provided to them and approval is given accordingly. 
 
Such types of loans are to be availed when you have no other alternative left to raise the money. The lender or brokers must be authorized and should possess a good reputation. The agreement for loans needs to be read carefully before signing any documents.

Published by Eric Foley