Will I Get Charged More For A Loan If I Have Bad Credit?

You might assume having a poor credit rating prevents you from ever being approved for a loan again. This isn’t always the case, as there are many financial products available for people with a poor credit history.

However, a so-called ‘bad credit loan’ isn’t necessarily the right solution for everyone; a Logbook Loan for example, is ideal for people with bad credit, but it is not a bad credit loan, which means there is no penalty for a negative credit history.

Bad Credit Loans

Bad credit loans are lending options tailored towards people with poor credit history. They provide access to lending and can help borrowers rebuild a credit score.

However, be aware that:

• Bad credit interest rates are higher than a standard bank loan

• Interests rates can vary based according to your credit history

• Repayments are often fixed and higher than a standard bank loan

• You may not be able to repay the loan early without a penalty

• There is no guarantee you will have a bad credit loan approved

The increased risk the lender is taking, when they loan money to someone who has struggled to manage their money in the past, is reflected in the higher interest rates and monthly repayments. So, while you might need the money urgently, it will cost you in the long term.

An alternative solution

There are alternative ways get a short-term loan if you have a bad credit history. With a Logbook Loan you can use your vehicle as collateral to secure the amount you decide to borrow – and you can keep driving the car until you’ve repaid the loan.

• Logbook Loans are ideal for people with a bad credit rating because your vehicle is put up as security.

• This means you can borrow against the value of your car, a secured loan generally has better terms for the borrower.

• If you pass us your spare keys as extra security, you might qualify for a discount

• You can pay us back early, and you won’t be charged for doing so; most people choose to pay us back early.

• Logbook Loans are typically between £1,000 and £1,500. If you own the car and it is in good condition and under 10 years old, some Logbook Lenders allow you to borrow from as little as £500 to as much as £50,000.

We’ve got a handy Logbook Loan calculator on our home page which will work out instantly how much you can borrow against your car. All you need is your registration number and your mileage.