Is It Possible To Receive A Personal Loan Despite Bad Credit?
Everyone has a need for money from time to time. Whether that need be to take care of a home repair, manage auto maintenance needs, open a new business or receive much needed medical attention, the need exists despite a person’s credit rating. With the many challenges individuals are facing in today’s economy, a common question asked by consumers is if it is possible to receive a personal loan despite bad credit.
The truth is, it is easier to qualify for a loan with excellent credit and a steady income. Many lenders will look for scores in excess of 650 and a steady source of income that has been in place for at least a year. This poses challenges for the rest of society, leaving them searching for loans with fair interest rates and terms and lost when it comes to understanding how to take care of their financial needs.
For those searching for a personal loan despite bad credit, there are a few pieces of advice that can help. First, look to friends or family members for assistance first. If you decide to go with this option, make sure the terms of the agreement are written up and made legal in order to avoid future strains on the relationship.
A second option is to seek out a co-signer for a loan. If borrowers have someone who is willing to accept dual responsibility for the loan payback terms, they can often receive approval for a loan. Just keep in mind that the co-signer must have good credit and will remain just as responsible for paying the loan back as the original borrower.
In addition to seeking out a co-signer, if the loan can wait, there are sometimes options to repair a credit score. The borrower should take a look at their credit report, and begin by reporting and correcting any inaccurate information on the report. In addition, potential borrowers should try to repay any past due debts and keep their other accounts current for at least a year. Again, this is only an option if the borrower can wait to apply for the loan, so it would not be a viable option if the money is needed for an emergency situation.
Finally, payday loans and collateral loans are available to borrowers seeking a personal loan despite bad credit. It is important to note that some companies offering these loans act in a predatory way, charging high interest rates and severe penalties, so the borrower should carefully review the terms of the loan before committing to it.
Personal loans are available to individuals with less than perfect credit, but they are much more difficult to come by than traditional loans. In times of distress, borrowers should carefully consider their options and read through the terms of any loan they decide to take out. This helps to protect the borrower, and it can lead to an increased feeling of confidence about the money being borrowed.