If you are not a millionaire, sometime in your life, you have to deal with bad credit problems. And when you do, getting personal loans for bad credit can be a little tricky but with some tips from us, you will notice it is totally achievable. You will need to be strategic about getting personal loans when you have bad credit.
Why choose Personal loans for bad credit?
When you have finance problems like finding bad credit auto loans, some people will tell you to get a payday loan. But wait, it’s true that this is a huge mistake. Make absolutely certain that almost payday loan companies have an annual interest rate averaging 300-400%. Your life will get lost in debt if you choose this option. So remember to stay away from these companies even if you don’t have access to traditional credit.
On the others hands, personal loans offer significantly lower interest rates than others, saving you a few hundred bucks in interest. If you want to consolidate debt or cover a big expense, personal loans for bad credit are your best option.
How to get Personal Loans approved with Bad Credit?
The first step you should take is to get a free copy of your credit report at Annual Credit Report or from an online free credit score websites. Then take you time to recheck if there are any inaccuracies. If you find any mistakes, rectify it by calling the collection agency or your bank and brought this to their attention. You should do some researches about your credit history, credit report before you have any conversation with the loan officer.
After that, why not try getting personal loans for bad credit with your bank first before you apply to any other lenders. Because your bank has all your finance information regarding average daily balance, direct deposit or overdrafts. All these information will be considered and increase your chances of success when applying for personal loans for bad credit.
If this try isn’t successful, then do more research to find out what is the best offer for personal loan with your credit situation. It’s probably pretty obvious that you should compare loan offers from several institutions to make sure that you are getting the lowest interest rate possible and try not walking into a scam. Many “promising” predatory lenders will do their best to have a contract with you while trap you in debt.
First place to start looking for good personal loans for bad credit is a credit union as these are nonprofit organizations who have strong customer service, lower fees and flexible on terms.
If you can’t find a personal loan for bad credit with a reasonable interest rate or your profile does not fit the lenders requirement based on your current credit, you may try another option.
Be creative by finding a co-signer who close to you, sign for a loan with you. This person could be your friend or family member who have better credit and trusts your ability to repay the debt. Then the lender will use the co-signer’s credit history to get your personal loans approved even with bad credit.
There are also other personal loans structures like peer to peer (P2P) lending which is an online platform with individual lender. And if you’re lucky, may be they willing to overlook your current credit status.
In conclusion, getting personal loans approved with bad credit isn’t always easy but with a little ingenuity, you have more options that help you move toward rebuilding your finance situation and boost credit score.