Everybody’s financial condition is not same: some people live very comfortably within their means; others sometimes struggle to make both ends meet and others move from one loan to another in order to sail through the month. While it may seem that only lower end of the population might be prone to it but the fact is that anyone can fall into the trap of a bad credit any time.
A few missed loan repayments, overdue utility bill, etc can be forgotten and your credit score can drop to the point that getting a loan in the future is not as easy as many think. That doesn’t mean that it happens with everyone. However, it is very important to keep in mind that the myth of bad credit only happening to irresponsible people is not true always.
Thankfully, if you have a bad credit score then it does not mean that you are stranded and you cannot avail any loan. Indeed, as unlikely as it may seem, borrowing a loan might actually be the way to improve your credit score. Known as Bad Credit Loans in the lending market, there are numerous lenders, both direct lenders and independent lenders, who provide specially designed loans for people with bad credit on instant decision with no fees.
Lenders are not as persistent in disapproving an application due to bad credit score as many think. The fact is that there are many other factors which play an important role when lenders examine your application like your status of employment and income.
However, a bad credit score do have some negative effect, so if you can improve your sore sufficiently then it will of a great help. Along with other basic criteria and an improved credit score can help you in getting a loan for high amount as well.
Always keep in mind that these types of loans are provided by those lenders who are willing to lend. So, if you can convince them that you will repay the loan on time then the chances of approval are very high.
Bad Credit is Not the Only Factor
A bad credit score is not the only influential factor as thought by many. In reality, a low credit score has a very limited effect on your loan application. The result is that a loan with poor credit score comes with a high rate of interest and lower loan limit. The loan repayment duration is larger which affects the affordability of a loan.
Your income and employment status are other important factors which lenders take into consideration while assessing your loan application. And since lenders are interested in these factors, your past financial mistakes as shown in your credit history have no relevance on your loan application.
In most cases, traditional lenders are not very inclined towards offering loan to a borrower with not so decent credit record. In this situation, only online lenders or direct lenders are the only options available for them.
Research plays a vital role while looking to borrow from a marketplace lender. So before settling for particular lenders, you should do proper research about the lenders. You can search for them on the Internet. Whether a lender is registered with FCA or not is also important to look for. Always borrow from an established lender.
You should request quotations from different lenders and compare the features provided by them. Go for the lender who is providing a lower rate of interest and good terms and condition.
Multiple Options According to Your Need
It is very important to know which type of loan is suitable for you. There are multiple loan options provided by these direct lenders.
If your requirement is only for a little bit of cash to tide over until your next paycheck then you can consider taking a payday loan. Lenders are offering this type of loan for a short duration with a small amount which will fulfill your need. Although they often come with a high rate of interest.
If your need is for a high amount then you should go for a long term loan. This type of loans exists for bad credit borrowers too and has comparatively lower interest rate than payday loans. However, the interest rate is still higher than traditional loans for bad credit borrowers because they present a high risk of non-repayment.
The best thing about these types of loans is that they help you in rebuilding your credit score which will help in future loans. But in order to let that happen, you have to keep repaying on a timely basis. Otherwise, it can worsen your credit record further.
In conclusion, we can say that it is not impossible to get a loan if you have a low credit score if you approach the right lender. It comes with a high rate of interest. Only a limited amount can be borrowed. It is very easy to apply since the online Blog application takes hardly a few minutes.