If you have a poor credit score and are struggling to get a loan, you’re not alone.
Bad credit loans are often needed by those who have low credit scores and who have an urgent need for money.
Whilst bad credit loans have a bad reputation, there’s times when we all need a helping hand. Not only can bad credit loans help you in trying times but can also play a crucial role in helping you improve your credit score.
However, before you get into “No credit check loans”, it is essential to be fully aware of what might be in store for you.
Therefore, in this article, we will tell you all about the pros and cons of bad credit loans and how they could affect you.
What are Bad Credit Loans?
If you have a low credit score, you may find yourself being unfairly rejected by conventional lenders who view you as too high risk.
You’ll then likely have to turn to bad credit loans, where typically minimal or far less stringent credit checks are performed.
Bad credit loans, as the name suggests, are loans that are provided to people with a bad credit history. These can be direct lender loans or institutional loans where the credit assessment is not conventional.
The latter refers to Salad Money’s More than your score loans, where we conduct affordability checks using an entirely different and fair assessment system. But make sure some form of creditworthiness check is conducted by whoever you choose, it’s a requirement from the FCA that lenders do “appropriate checks”.
Let us now explore the pros and cons of bad credit loans.
Pros of Bad Credit Loans
1. Fast Cash During Emergencies
If you’re looking for urgent loans for bad credit, then you’re in luck. The best part about these loans is that you can get cash fast
This is especially helpful during emergencies when you don’t have the time to wait just to get the loan approved and then wait some more for the money to land in your account.
2. Easily Accepted
If you're applying for bad credit loans, the chances of your application getting accepted are higher than anywhere else.
3. Helps Repair Credit Score
Taking a low credit loan and then repaying it on time can greatly help improve your credit score and make it easier for you to borrow the next time.
4. Can Be Used for Whatever You Need
Unlike other loans that are provided for specific purposes like home loans or debt consolidation loans, bad credit loans can be used for almost anything.
5. Longer Repayment Period
These loans usually have a longer repayment period, giving you a decent amount of time to manage your finances and pay them back.
Cons of Bad Credit Loans
1. Higher Interest Rates
Bad credit loans are infamously known for their exorbitant interest rates. This is because the risk the lenders take while lending these loans is higher than usual.
However, at Salad Money, our short term loans are designed to be fair and affordable.
2, Extra Fees and Penalties
Some low credit loans come along with a bunch of random fees like application fees, origination fees, late payment penalties etc. This can be an extra burden for a person already struggling with money.
3. Not Always Reliable
The problem with some bad credit loans is that some of them aren’t licensed lenders and are thus not very reliable.
Moreover, the fact that most people trying to get bad credit loans are in need of money makes them an easy target for cons and scammers.
Authorised and regulated by the UK’s Financial Conduct Authority, you can rest assured that you’re in good hands with Salad Money.
Choose Salad Money for Fair and Affordable Personal Loans
Now that you know all about loans for bad credit, let’s talk a little more about Salad Money loans that come with the pros and without the cons.
Our highly reliable, fair and affordable personal loans are perfect for you if you have been wronged by the credit score system.
With our unique affordability assessment method, you can get the best personal loans without having to worry about your credit score.
Our “More Than Your Score Loans” are specially designed to provide safe and reliable loans to employees in urgent need of money.