If it is your case that you have a low score but you would still like to borrow money, then first of all draw up a sort of plan for yourself where you will answer some questions. Firstly, how much would you like to borrow (or even better how much do you need to borrow, with emphasis on need), and for what purpose (debt consolidation
, home improvement, wedding, holiday or car). Then you should be able to make an estimative and tell for how many years you would like to contract the loan (on a scale from 1 to say 30).
Perhaps the most important factor you will put down is your monthly income including any other benefits. In case you are a homeowner with a mortgage already then put down details like your current mortgage balance. This way you will have in front of you something like a map, something on which you see all your incomes and outgoings and you will be able to foresee which is the amount you can afford to pay back monthly. You can opt for a secured loan as well as for an unsecured one.
If you have the necessary flexibility and if you can afford it then it is best you choose the secured loan because that means there will be a collateral to your loan which further mean there is a guarantee for your loan. Choose this option if your income is steady and regular and if you feel you can pay each monthly balance in its time, without jeopardizing the safety of your home.
In case you choose an unsecured loan either because you don’t own a home or just simply because you don’t want to put it at risk, then you should expect to pay some higher interest rates than usual, exactly because you are a sort of risk for the lender. Also, in the case of an unsecured loan expect smaller amounts of money you are able to borrow. It may happen that if you want to contract an unsecured loan, you can do it only by having a co-signer or a guarantor (because your credit score won’t be taken into account, there has to be some sort of guarantee).
Basically being eligible to apply for no credit scoring loans, you have to be somewhere much before declaring yourself bankrupt or applying for an IVA (Individual Voluntary Arrangement), because if such the case you are not eligible for the loan. If you thoroughly browse the market you’ll see that credit loans
that don’t require your credit scoring almost never exceed a total of £5,000 (best scenario). Many times you are required to have a debit card which is connected with your bank account deposit (this in case you have a deposit), so this is another option of a guarantee for your loan (in case you default with payments, they may withdraw the money from your account). And as another option, it may be required that you be entitled by your co-signer to use his/her debit card, and this is why you should think twice before opting for such a deal because you don’t want to drag into debt someone else too.
Typically APRs are very high on such loans,
exactly because there is no 100% guarantee that you will pay back your loan, or at least the criteria are not as clear as in the case of a secured loan. It is only you who knows best whether such a loan would be in your advantage or not, and whether with all the terms and conditions, with a way too high APR and a too short repayment period would be convenient to you in the first place.