To get a loan from any reputable bank or online lender, you must have good credits. The basis of any loan is laid on the strength of your credits which are earned when you pay all your loans and have a good payment history. However, here comes a question about the ones who have bad credit and are still in dire need of money. These people can also getloans.The questionthat arises is how?
Process of getting loans
With just a few clicks, you can get a quick cash loan. These are considered emergency loans and can be given even when you have bad credit.These emergency loans are provided fast and the payment is made up front. You can have the loan even within a day. If you decide you want a loan at the start of the day and fill the online form, chances are you will have the money before you go to bed. There are even companies that will provide you with loans within an hour and all you have to do is call them or fill their online form. Many lenders don’t charge you for the application fee and early payout fees which further encourages people to get these quick loans.
It is better that people only go for these loans when they have emergencies because the quota for these is limited. If you have adequate credit, it is more advisable to take out loans from normal banks. This has made a lot of lives easier. People, who previously couldn’t have gotten a loan due to their bad credit and had to go through many hardships to get someone who will be willing to give them a loan at a nominal interest rate can always take advantage of this.
When a lender goes through a loan application, the borrower’s credit score is one of the important factors linked to the approval. The lenders want to be assured that the borrower has shown a decent repayment track record with no defaults in the past.
With a bad credit score, getting access to credit could be quite challenging in the loan market. However, this does not mean you have no borrowing options. Here we have explored some of the ways using which an individual with bad credit score can get loans.
Loan Against Assets
You can get a quick loan by pledging your assets even with a bad credit score. As you mortgage your property, the lenders may be flexible in terms of eligibility criteria and sanction the loan that you need. The interest rates may be slightly higher as you have a bad credit score. However, this is one of the easiest ways through which you can get quick funds for your immediate needs.
Secured Credit Cards
Secured credit cards allow you to access quick loans even with bad credit. If you have a fixed deposit, you can get a secured credit card. The credit limit is allotted against 70 to 80% value of the fixed deposit.
Though you can get a secured credit card to manage your finance, this does not improve your credit score unless you have cleared your past dues or negative account which are the causes for your bad credit score. This credit card may give you the access to emergency funds, but it will stick with you for a long-term.
There are few financial services companies that offer half the amount of your monthly salary in advance to meet your short-term cash needs. These organizations do not consider credit score as the main criterion to give out the loans. The process is quick and the loans are disbursed directly into your bank account after the approval.
Peer to Peer Lending
This is one of the fastest ways of getting instant cash in a click of a button. Peer to peer lending platforms collect the personal information of the borrowers and process the application. It is quicker, and you can get hold of the cash immediately after the approval. The rules are more flexible, and chances are higher in accessing the credit. The interest rates tend to be little more than the title banking system due to its convenience and ease of application.
Get a Co-Applicant
When you have a poor credit score, you can seek the help of a co-applicant to get a loan. It could be your friends or family members. The co-applicant can be the primary applicant whose income and credit history will be considered for the loan. In case of a home loan, the rules might vary for a co-applicant as the banks lay down certain conditions.
You can use one of the ways mentioned-above to get loans when you are in dire need for money. Bad credit score is not something that lasts for eternity. You can always improve your credit standing by identifying the reasons that caused the downfall.