Bad Credit Loans
Are you struggling to get approved for a loan due to bad credit? Discover alternative lenders that will help you with a loan despite your poor credit history.
View Bad Credit Loan OffersAre you struggling to get approved for a loan due to bad credit? Discover alternative lenders that will help you with a loan despite your poor credit history.
View Bad Credit Loan OffersBad credit loans can be a helpful option for individuals who need access to funds but are unable to obtain traditional financing due to their credit history.
These loans typically have higher interest rates and fees than traditional loans, as they are considered more risky for lenders.
The term “bad credit” is not really as terrible as it sounds. It doesn’t always imply that your whole credit history is bad. It just suggests that your credit profile could be better and isn’t as satisfactory as you would like it to be.
Rejection by lenders in the past is usually due to the fact that your credit score didn’t adhere to their specific requirements.
There are many bad credit loan lenders who are ready to assist you if you fall into the bad-credit category, or even if you are blacklisted. Their primary concern is whether you’ll be able to afford a credit loan. Your credit history doesn’t have much of an influence on the qualification criteria.
These loans are specifically designed for those with a less than favourable credit history. Unfortunately, they’re much more expensive than traditional loans.
Your credit profile is in essence a history of how you’ve honoured your financial commitments in the past. If you have adhered to all your repayment agreements it’ll be favourable and you’ll be attractive to lenders.
Each time you secure a loan, it’s recorded on your profile, and how you repay the loan will either benefit or reflect negatively on your credit score.
Non-payment will always have an adverse effect on your score and you’ll be flagged as high-risk. Traditional lenders won’t grant you any credit.
Understanding credit ratings
In general, credit scores range between 300 and 850. Under 580 is flagged as low or bad. There can be a number of reasons for your bad rating, such as a too-short credit history, a history of late payments, too much debt when compared to your income, or a combination of all of these factors.
A low credit score usually has two basic explanations.
Due to unforeseen challenges, such as loss of income or other financial challenges, you’ve been unable to keep all your credit payments up to date. Because you have just skipped a few repayments, you don’t have any judgments against you yet. Unfortunately, your credit score will now be too low to qualify for a traditional loan
You have not borrowed money before and therefore have no proven credit history. There’s no credit information for banks to work on and you’ll therefore not qualify for a loan. This is because you will be categorized as a high-risk client who might default on payments.
The easiest bad-credit loans are secured, co-signed, and joint loans because these mitigate the lender’s risk as they offer a form of collateral. Pawnshop- and car-title loans also resort under this category.
These types of personal loans are the easiest to secure as they don’t require co-signers, surety, or a joint applicant. They’re therefore much more costly than loans from lenders who do credit checks.
The drawback of these loans is that you’ll get very expensive monthly repayment structures that will put additional pressure on your budget. This could exacerbate your financial situation even more.
Even if a lender entices you with a longer repayment term, you’ll end up paying much more interest in the long term because it affords the lender more time to collect interest from you.
These loans will hardly have an impact on your credit score, which could leave you in an unfavourable credit situation for longer.
You’ll have to produce security to qualify for these loans as the lender needs to mitigate his risk. Should you default on repayments, you risk losing your precious asset. Approval is usually quick since the lender’s risk has been addressed.
A cash advance enables you to draw money from your credit card’s available balance up to your credit limit. This additional amount is incorporated into your card’s outstanding balance. These advances usually come with very expensive interest rates.
Although a cash advance can get you out of a financial pickle quickly, it will take you much longer to get out of your credit debt and cost you much more too.
This is a small once-off short-term loan you repay when you get your next paycheck. These loans are the easiest to get. It’s advisable, however, to try to avoid them as lenders charge extremely high-interest rates for this convenience.
Lastly, you can try borrowing money from family or friends as they don’t care about your credit score. If they have a good credit rating, they can even co-sign a loan application for you.
There are a lot of predatory lenders out there and you could soon find yourself drowning in even more debt. Ensure that your loan agreements are valid and that they include long-term benefits.
It’s always a good idea to contact a non-profit credit counselling agency to advise you on the best options out there.
You need to compare all your options carefully. Take your time doing this so that you don’t fall into the trap of accepting the first credit offer that comes your way.
You might feel at a loss about where to start looking for a lender who’ll be willing to grant you a loan. Securing a bad credit loan is easier than you think.
It’s a sad fact that there are a lot of loan sharks out there, waiting to devour you at every turn. These loan scammers target the desperate and elderly, and those who are inexperienced when it comes to making sound financial decisions.
Keep in mind that the objective of a bad credit loan is two-fold: It enables you to repay debts and serves as a tool to improve your creditworthiness. It’s therefore vital that you honour the loan agreement.
If you’re unable to meet your obligations for whatever reason, you need to alert the lender to the fact immediately. They’ll usually try to help you.
It’s vital that you scrutinize the interest rates and special features of the loans you consider applying for. Only consider credit providers registered with the National Credit Regulator (NCR).
Look at those lenders who offer the amount you want and then eliminate them according to the amounts they are willing to offer, their annual interest rates (APRs), and the number of additional fees you’ll have to pay. The most crucial considerations are the features of the loan agreements and interest rates.
So bad credit loans aren't as bad as you thought, are they?
It makes financial sense to ensure that your credit profile stays attractive to lenders. Unfortunately, life happens and bad credit loans offer a quick fix in case of an emergency. Only opt for a bad credit loan if you’ve exhausted all other avenues, as these loans are very expensive and can lead to even more serious money woes.