How to get emergency cash loan if you have bad credit

Financial emergencies can come unexpectedly in any form and at any time in life.

Expenses may crop up suddenly, like needing money for treating an illness, an accident, or some other situation.

Under such circumstances, taking an emergency cash loan is the only option if your savings are inadequate.

The situation becomes even more complicated if you have bad credit.

However, there are loan options even when you are faced with credit problems if you can afford the repayments.

To ease your dilemma, we have listed some of the loan options you can get even with bad credit.

Options to get an emergency cash loan if you have bad credit

These are some of the alternatives for a cash loan in case you have credit issues:

  1. Budgeting loans: If you have no other options, you could apply for an interest-free budgeting loan from the social fund. Budgeting loans are ideal for paying off unexpected expenses if your income is too low. You could use it for expenses like buying clothing, furniture, or household equipment, or for meeting moving expenses or travelling costs.
  2. Credit unions: These are non-profit enterprises established to help people belonging to the same community or those with some common bond, such as working for the same employer. The rules imply that you need to be a member of a credit union and save for a specific period before you can borrow. There is an upper limit on the interest charged by credit unions up to 3% per month (43.6 APR). These unions provide savings and loan accounts, while larger credit unions have other products to offer as well. Another benefit is that these loans do not have any hidden charges or fines if you repay in time.
  3. Payday loans: These are small-value loans given for short periods like three to twenty-four months. You can get these loans with or without a guarantor. These loans are ideal when you need money to pay any urgent bills or meet your expenses till payday. Earlier such loans were for only two to four weeks, which you could repay on the next salary. Payday loans are more flexible these days, allowing you to spread your repayments over three months or one year. These loans do not require any security.
  4. Pawnbrokers: You can get loans from pawnbrokers at high interest rates, keeping something valuable as security, such as your jewellery. The item kept for security is called a pawn, and if you fail to repay, you lose the pawned item. However, you can redeem the pawn any time by repaying the amount due. You have to sign a credit agreement that states the duration of the loan and its cost. Opting for a pawnbroker who is a member of the National Pawnbrokers Association would be advisable since they have a code of conduct for its members.
  5. Cash against gold: You can get cash by providing your gold items for security. These loans are offered even if you have credit issues. Your valuables are stored safely until you repay your loan.
  6. Home-credit: In home-credit loans, also called doorstep lending, a company offers a loan and collects instalments weekly or fortnightly from your home.  These loans are mostly taken for small amounts, like £50 or £200. They usually have a higher interest rate, greater than bank loans or credit cards. Ensure that you are taking a loan from a home credit lender authorized by the FCA (Financial Conduct Authority). If the lender  does not provide any proof, it could mean they are illegal.
  7. Loan sharks: Borrowing from these lenders is not advisable since they are mostly illegal and charge exorbitant interest rates. They may even harass you if there are any delays in repayment. You must also check if they are FCA authorized.

Though you get many options for an emergency cash loan despite having credit issues, you must weigh them carefully before selecting an authorized lender. Direct lenders act as brokers between you and the lenders without charging any fees, either in advance or during any stage of your loan process. These lenders offer you loans at the best rates possible after reviewing your application details. If your criteria is satisfactory, you could even receive your loan on the same day you apply.

 

 

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