Different ways to borrow money in the UK
Short term loans
Short term loans are typically unsecured, and you can borrow anything from £100-£2000. The monthly loan repayments are usually organised around your payment schedule, lasting anything from 3 to 6 months. These loans are designed to be repaid quickly and can last at least three months.
Note: By paying your loan on time, you can effectively build up a good credit score.
Bad credit loans
A bad credit loan is an unsecured loan designed for people with a very poor credit score. These loans are often more expensive as the lender charges more interest than regular short term loans to counteract the risk of lending to you. On the other hand, if you successfully repay the money borrowed on time, you will build up a good credit rating. (This is one of the credit building tools used by credit repair companies)
A secured loan is a form of long-term borrowing where the loan you apply for has a guaranteed asset attached. If you default in repaying the loan, the lender can repossess the asset. These loans range from £1,000 – £100,000 and often have a lower Representative APR when compared to unsecured loans.
A Guarantor personal loan provides you with the chance to have someone act as a guarantor for the application. This means, if you struggle to make repayments or make a late repayment, they will cover them instead of you. If you have a poor credit rating, applying for guarantor personal loans with bad credit could help you get the funds you want at a decent interest rate.