There are many of us that have a poor credit rating due to a number of reasons. It could be because we get behind in making payments, our income is not very high or we have lots of debt. When people are in this situation, of having a poor credit record and they need to borrow money then they have very few options available to them. There are some though and it is worth understanding more about them so that you can make an informed decision as to whether you want to use them, if you are in this situation yourself.
payday loan companies tend to do no credit check and so whether you have a good or bad credit record makes no difference with regards to whether you are likely to be accepted. There are very few restrictions apart from being over 18, having a bank account, having an income and living in the country that the lender is based in. This means that this can be a handy option, particularly as it is quick to arrange so works for when you need money in an emergency. However, they can be expensive because of the risk that they take on with their customers. You also normally have to repay everything that you borrow in one go, which can be difficult for some people to manage. They do not lend as much money as some loans, so you can normally only borrow up to a thousand pounds with them.
Payday loans do get a lot of negative press about being difficult to manage and expensive. Like with all loans, it is therefore really important to make sure that you compare different lenders to see which is the cheapest. You should also make sure that you are confident that you can manage the repayment. Find out how much the loan will cost as well and you can decide whether you think that it is expensive or not.
A logbook loan will use your car as collateral. This means that if you miss repayments, the lender could take your car and sell it in order to recoup their losses. Obviously you will need a vehicle and if it already has a loan against it, then the lender will need to calculate whether they will be prepared to lend you more money against it. They will need to see the vehicle so that they can calculate the value and make you an offer with regards to how much money they are prepared to lend you.
There is a risk with these loans that you could lose your car if you cannot afford the repayments. Make sure that you protect yourself against this by finding out how much the repayments will be and calculating whether you will be able to afford them. If you think that it will be difficult then set yourself a budget and stick to it. Imagine how difficult it will be if your car is gone, it could even be that you will not be able to get to work anymore. It is worth considering what could happen so that you can decide on whether you feel that the risk is worth taking. Only you know how important your car is and whether you could cope without it.
Borrowing from friends and family
This option can often be seen as an easier one because it is likely to be cheaper and you will be under less pressure to repay quickly. However, it can also bring problems with it. Obviously you need to know someone who has the money to be able to afford to lend you what you want as well as being willing to do it. Some people are not up for lending to others and that opinion should be respected as they may feel that it could lead to problems.
If you do borrow from friends and family it is worth having a formal agreement as to what you are going to do about repaying them. They may expect you to repay as soon as you can and you may hope to pay in small instalments to make it easier. This might mean that you argue about it afterwards as they may want more money from you than you can afford. They may also suddenly need the money themselves and it can be very awkward if you are not in a position to be able to give it to them when they need it.
It can not only cause pressure in the relationship between the two of you but possibly also with other people as well. There may be jealousy from others that you have been leant money and they have not. They may see it as you being treated as a favourite and they might want to borrow money form the same person but cannot do it now because you have. It can be a really tricky situation and so is well worth approaching it with caution.