If you have been knocked out of your loan application because of blemishes on your credit, it can be hard for you to deal with everyday life. Good thing, you have lots of options available to get the loan you are looking for, while, at the same time, rebuilding your credit.
Tips to follow before getting a loan
1. Consumers should be aware about the importance of checking credit history. A credit history is included in the credit report and is usually checked for inconsistencies and discrepancies before taking out a loan. The report allows the consumer to detect if something wrong has been reported, because this can affect their credit rating and the decisions of creditors giving out loans for bad credit. Keep in mind that a bad credit score limits an individual’s ability to get premium loan offers, but checking credit history will help decide what type of loan best suits him/her given that his/her current credit standing isn’t doing good.
2. Try other options available for you, like seeking assistance from family members or friends. Before applying loans at major lending institutions, ask significant others first if they can extend a loan to you. This could be very beneficial for both parties, because there’s no need for them to check your credit history. Aside from this, you could save a lot from the high interest rates of bad credit loans, as well as the time it would take to get your loan application approved. Just be responsible in paying them what you owe, or your relationship could be injured.Another option could be through P2P (or peer-to-peer lending) – usually found online. P2P is a win-win for both the borrowers and lenders. Borrowers have to pay low interest rates than regular loans, while independent lenders could earn high interest rates.
3. Check with the credit union or your personal bank first. These are two common places that best suit individuals with poor credit. Your personal bank may approve your application without too much inconvenience, because they are more than willing to work with long-time clients – like you – than with first-time strangers. Keep in mind, though, that your banks will still impose applicable interest rates on your bad credit loans, but they are more lenient in extending a loan to you, because you have money in them. Credit unions, on the other hand, are more suitable for those who have a stable paycheck. Loans from credit unions are usually offered through an employment. Clients with jobs are more agreeable option because credit unions are guaranteed to have the loan repaid properly. Usually, the loan is deducted from the employee’s salary.
4. Loan-seekers can also search online to look for companies that give out loans for bad credit. Make sure to read the terms of conditions before applying, because you might get caught up on hidden fees and charges. Finally, see to it that the company is well-established and has a good consumer rating.
5. The fastest way to obtain a bad credit loan is to look for payday loan. This loan can be applicable for someone who has emergency with no other options of obtaining cash. However, payday loan carry high interest rates and has an extremely short life. If an individual cannot repay on time, more interest is added and the life will be extended. Proceed with caution before taking this option into consideration. If necessary, opt this as your “last resort.” Don’t just go for payday loans if you aren’t sure of repaying on time, because this can cause serious problems on your credit and your finances, as well.