Home Business Insights & Advice How to secure a personal loan if you have bad credit

How to secure a personal loan if you have bad credit

by Sponsored Content
20th May 19 9:54 am

Even if you don’t have good credit, it is still possible to qualify for a personal loan. If you are in need of funds to help cover credit card debt or deal with an unforeseen emergency, a personal loan is an excellent option. These loans usually don’t require any collateral, and payments can be made in installments over time. If your credit score is less than ideal, don’t stress! There are still measures you can take to receive the cash you need.

When applying for a loan, lenders will run a check on your history and take a look at your credit score. These scores can vary anywhere between 300 to 850, with a higher number indicating a better rating. If your score falls in the lower half of this range, you will find it more challenging to get approved from most lenders. National and community banks usually have minimum requirements for credit scores around 600. Thankfully, there are other avenues that you can explore to receive your funds.

One approach to consider would be finding someone willing to act as a cosigner. Certain lenders will accept a cosigner with good credit to enter into the contract by agreeing to cover the loan in the case that you default on it. This can help offset the negative effects of your lower credit score, and increase your chances of approval. If you have someone in your life with a good credit score that you share a mutual trust with, asking them to cosign your loan can be a major boost.

If a larger bank will not approve you for a personal loan, consider talking to a credit union. These organizations are structured differently compared to national banks in that they are nonprofit cooperatives that are owned by their members. Credit unions typically have less-rigid requirements to qualify for a loan, and some offer special packages designed for people with poor credit. Many credit unions provide savings-secured loans that will help you rebuild your credit. The potential to secure more favorable terms on your loan is another advantage to utilizing credit unions.

Another option that has seen a rise in popularity is borrowing from an online lender. While these companies are more likely to approve an applicant with poor credit history, they are also likely to charge significantly higher interest rates. This will lead to you paying more over the course of the loan, and can even land you in a worse position than where you started. Online lenders can still be a great option depending on your situation, but be sure to read the fine print and fully understand the terms before you agree to a loan.

So don’t despair if you find yourself in a difficult situation with a poor credit score! Look into these options and figure out what would be the best path for you. Make sure to do good research, and take the time to thoroughly read through all paperwork before signing a loan. With proper care and planning, securing a personal loan can be just what’s needed to cover unexpected costs.This article was provided by Jacaranda Finance, click here to find Bad Credit Loans Up To $10,000 | Apply Now!

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