You may not think that having bad credit is too big a deal, but the minute you try and arrange finance, you will soon realise the importance of having a good credit rating. So many things in modern life are dependent on credit ratings and if you have a bad credit rating, you may find that life is passing you by. This is why knowing that there are finance options available to people with bad credit is a great comfort to most folk.

In an ideal world, people would have good credit scores or credit scores wouldn’t play a part in deciding whether people need credit or not but of course, this is far from being an ideal world. This is why it is important to understand all of the options that are available when it comes to credit for people with bad credit scores.

Logbook Loans are an Option

If you own a car that has been paid for, you may be able to obtain a loan based on the vehicle. There are many names for this style of loan but a log book loan is one of the most common. Using your vehicle as collateral for a loan may not be ideal but it is a way to obtain the finance you need.

Just because you have bad credit doesn’t mean that you can’t have a mortgage and it may be that you can use the equity from your home to leverage the funding you require. There is a need to take this seriously because the consequences of missing payments will be severe, but you should find that this is another option to think about.

You may be able to obtain a Private Loan

As the name suggests, this is a loan coming from one person to another. If you have a family member or friend who is willing to provide you with the money you need, this is likely a smart aspect. The lender may not ask for a high level of interest, if any at all, and you may find that they are willing to be flexible with respect to repayment terms.

However, there is a need to take this style of loan seriously. If you don’t, you could ruin a friendship or cause a serious rift in your family. It is vital that you enter a private loan as seriously as you would any other loan or the fall-out may have a major impact on your life.

Personal Loans are Still an Option

While you may think that a personal loan is not an option due to your bad credit, there are still ways in which you can obtain a personal loan that meets your needs. Even if the banks have turned you back, there are options for you to consider. There are bad options and good options when it comes to finding a loan in this manner and when it comes to bad options, a payday loan option is likely to be the worst option you can find.

This is because a payday loan carries such a high rate of APR; you will end up paying a large sum of money to facilitate the loan. There is also the fact that you need to pay this loan back in a short period of time, which may be difficult for some people. Unless you are in the worst financial position possible and you have absolutely no other options left, you need to look at other solutions than a payday loan.

Thankfully, the guarantor loan option is a much better solution. There will be some people who bracket these loans together but by opting for a guarantor loan, you can obtain a loan for more money and at a much more attractive rate of APR.

The presence of the guarantor makes all the difference when it comes to finding the loan you are looking for, and this is why so many people with bad credit look to take out a guarantor loan. This is a loan that is available to you if you have a bad credit score or no credit score, you just need to prove that you are in a position to pay the loan back. If you can do that, and someone is willing to vouch for you, you’ll find that a guarantor loan is one of the most sensible options when it comes to finding the loan that is right for your needs.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.