Trying to secure a personal loan and it seems the odds are against you? Your financial records, especially concerning loans and repayments may be a trail of figures that reveal you are very incompetent to repay any debt or money you may need from a bank or other financial institutions. With the way banks, especially handle the matter, you may be left feeling there is just no hope to get a loan. Well, maybe not with them.
All in all, banks have a good reason for being especially strict with borrowers and their credit scores. It is bad business for any bank to give away money to any person or institution which shows the slightest proof or possibility of being unable to pay back. Bad credit scores show that you are a high risk customer and making a loan to you may be just as good as losing the money altogether.
The standards and regulations of banks, credit unions and other financial institutions are strict enough to ensure that they don’t fall into the trap of lending to someone whom they will have to run after to recover the debt. And the best way they can determine whether or not you are going to repay and do so timely is by checking your financial records. Therefore, whatever loans you may require, no matter how small it may be in your own estimation, you have to either show proof a good credit history or give them reasons to trust that you are committed to making a change. The best credit loans monthly payment deals cannot just go out to anyone needing money. It has to be deserved.
If you are unsure of your financial status or do not know where you stand as far as bad credit is concerned, here are some warning signs that signal bad credit. These should help you understand how likely it is that you will get one of the best personal loans for bad credit.
Look out for how much more you are paying on normal interest rates
Check if the interest rates you are paying are more than the usual rate. If that is the case, then you are certainly moving towards the bad credit red zone. When a bank is considering making a loan to you, the interest rate you have to pay is not necessarily what you may have seen advertised by the bank. That is because your credit scores determine how much interest you are going to pay on the given loan.
To put it simply, your credit score determines your credit worthiness and the more credit worthy you are, the less interest you will have to pay for any loan given to you by a bank. More so you have a better chance of getting one of the best personal loans for bad credit at low rate and why not the best credit loans monthly payment agreement which will definitely be least stressful for you to repay. So you can know how bad or better off you are on your credit score by looking at how much more interest the bank charges from you from the normal or usual charges.
The timeliness with which you pay for housing, monthly bills and other utilities actually tells where you are with your credit scores. A trail of late payments should tell you that you are actually on the bad side of the credit line because that is the way banks are going to interpret it.
Another sign that you are working on bad credit is having a regular overdraw on your checking account. This means you are actually having a hard time staying debt free and that is not a good signal to banks and other financial institutions from which you may have to obtain a loan.
The length and records of your credit history
A long credit history could actually be a good thing for you and turn out to work for your advantage if you have been doing things right. When you have a long history of taking loans, that history had better been backed with a positive record of repayment.
First of all, a long credit history gives lenders a better opportunity to review and make judgments of your responsibility with debts because they have more records to consider and judge from. So in considering your record history, if you have repaid every debt timely, you will be considered by the bank as a low risk factor and more likely to get the loan or possibly get one of the best credit loans monthly payment arrangements there is to offer.
Type of credit and how it is used.
Another method you can use to know where you stand on your credit score and which banks will use to determine whether or not you get a loan is the type of credits you have been getting in the past and especially how you have been using those loans. So according to banks, it is not all about getting loans. How you use the loans you got in the past tells them how responsible you are with loans and reveals how likely you are to pay back if you get the best personal loans for bad credit they can offer you.
So you should ask yourself; what kind of accounts am I using? Retail, credit cards, mortgage loans or finance company accounts. Also consider the type of credit you get and what you get it for. Getting a loan to buy a horse ranch for example may have the capacity of hurting your credit score if the bank considers it an unwise investment to make with a loan. If you were looking to get one of the best credit loans monthly payment deals, you will be standing in your way by intending to “misuse it” as the bank will put it.
Be careful with the inquiries you make on credit and better still the number of credit accounts you open at a time.
Making credit enquiries simply means you intend to take on several loans. Opening different credit accounts within a short period of time is even more dangerous as far as your credit score is concerned. When you are going in for a single loan, there is no need to have several credit accounts. Banks consider that these accounts mean you are about to get loans from different financial institutions and this reduces the probability that you are going to pay back when the time comes.
So those are some important tips you can use to figure out where you stand on the credit score chart and how likely it is that you will get the loan from the bank. Well, considering that you have a very poor credit score (which is the most probable reason you are reading this), all hope is not lost. You don’t need to turn to payday lenders or put yourself at their mercy. That will be an unwise choice to make and believe me, it is far better you do not get any loan at all than get one that way. Certainly at the end of the day you will be deeper in debt and having to deal with unreasonable pressure and threats to repay than you can ever imagine possible.
Good news is, for those who may have found themselves in a situation where obtaining a loan is becoming very difficult because of bad credit, there are some alternatives which you may consider even better than getting loans from a bank. Some of them are actually capable of offering you the best personal loans for bad credit. Let’s look into some other options which will definitely prove very helpful. Apart from banks, which work with strict policies, there are other avenues to help you get a loan despite your bad credit scores.
Securing bad credit loans: Some alternative options to consider
Before we move on, please bear in mind that even with these alternative sources, your chances are determined by how bad your credit score is. That is to say, if your credit history is really, really bad, you may find it difficult getting a loan from one of the alternative sources listed below. However, they still hold the best chances of you getting a loan anyway, especially with online loans for bad credit.
1. Get help from a credit union
The main reason why one with a bad credit history has a better chance of getting a loan from a credit union is the fact that though credit unions function like other financial institutions, they are non-profit making institutions. So the point of focus is not necessarily making profit. Consequently, though you may be a high risk customer, they can more readily take the risk of giving you the loan. There is another part of it.
Credit unions that are connected to or affiliated to your employing company may be willing to ignore your credit history and instead consider your integrity and commitment at work to help them decide whether or not they are going to give you the loan. More to that, some credit unions are actually looking for borrowers. Look for one which can give you the least costly deal that suits your credit scores.
As a quick tip to this particular point, it will be best to get a loan from a financial institution with which you have something in common. People of the same profession for example usually create and run credit unions. So if you are a teacher, try getting a loan from a credit union created by people of that profession. It is most likely they will understand with you and be more willing to overlook your shortcomings.
2. Family and friends
In case you cannot get a loan from a credit union, or maybe don’t just want to take that option, you may want to consider getting one from a family member or friend. Agreed, it is not a convenient option but at least it is surely better than getting a loan from a bank or other financial institution with high interest rates. As a matter of fact, there are few other sources from which you can obtain some of the best credit loans monthly payment. If you can find a friend or family member willing to loan you money, you have to keep in mind that there are few things that can strain a relationship and set even family members apart as money. While they will be more willing to sympathize with you because of relationship, or maybe trust you because they know you beyond your credit scores and history to be trust worthy, you have to make up your mind to not let that trust down.
No matter how close the relationship between you and a friend or family member is, it is important that you consider a loan from them as serious or probably even more serious than you will one from a bank. Make every necessary documentation and ensure that you hold to your end of the deal because when next things go south and you are seeking financial refuge, they are most likely to reach out to for help. Keeping your records as clean as possible with these groups of people is to the best of your own interest.
Lastly, though it may be difficult for a single family member or friend to give you the entire amount of money you may need, you can get a few dollars from several friends and family members to repay within a reasonable period of time. In this case too you have to be really cautious and make sure you do not let them down because that will mean you are counseling out several chances of securing loans at the same time.
3. Make use of a co-signer
Another outstanding option for getting bad credit loans is finding someone who can trust you enough to be a cosigner. In this case, the loan could even be gotten from the bank or any other financial institution at a lower interest rate because the bank will be considering that person’s credit history instead of yours. This also means that you will need to go beyond just finding someone who can share the risk with you. That person also has to be a low risk borrower by the bank or credit union’s standards.
The records of the loan and terms of repayment are spelt out on your credit reports and that of your cosigner. This is risky both for you and the cosigner because if you default on the loan or fail to pay back timely, you will seriously affect your cosigner’s credit score negatively. On the other hand, though, if you are diligent to meet your end of the bargain, you are going to improve your own credit score and better your chances of getting a future loan without the help of a cosigner.
4. Peer to peer lending
Peer to peer lending, commonly called P2P is a means of obtaining bad credit loans without the assistance of any middle man or intermediary. It is also similar to online loans for bad credit. As a matter of fact online loans for bad credit operate on the peer to peer lending principles. Peer to peer lending offers some of the best personal loans for bad credit. You can look at it as crowd lending because, in a way, that is basically what it is. As a result of the absence of a middle man to regulate the process, it requires that those involved put in more time, make more efforts and be willing to take more risks. Because of the bank’s extensive strict checks, peer to peer lending is popular amongst individuals and businesses that need to carry on with projects.
With peer to peer lending, lenders give out loans to borrowers after looking at their credit history and scores which are displayed on their profile on peer to peer platforms. They decide whom they want to lend to and make known how much they are willing to lend to borrowers of their choice. Consequently, a single borrower could get the full amount he needs from a single lender or can get different smaller amounts from different people. When a loan has more than one source, monthly payments definitely have to be made to these different sources at the same time till each loan is completely paid. The interest rates here are usually attractively low.
5. Taking the Option of Home Equity
Using Home Equity loan is another alternative you may want to turn to when you need a loan with bad credit. As a matter of fact, you may want to take this option if you really need a large sum of money and cannot get it any other way. You should know of course that you stand the risk of losing your property if you are unable to pay back according to agreed terms. The value of your property determines the amount in loan that you can get and that value is not necessarily yours to decide. It is determined by an appraiser sent from a lending institution.
Apart from these choices there are some popular lending sites you may want to consider signing up on and securing a loan from. Online loans are quite unique in the way you obtain them. If you have a really bad credit, then you may have to consider and sign up on www.Badcreditloans.com which is reputable for helping out people who are in a critical condition.
To be sincere, your options are limited as far as having really, really bad credit is concerned but badcreditloans.com offers help. It simply makes the connection between lenders and borrowers and facilitates the process of getting and repaying a loan. Like other sites that specialize in online loans for bad credit, they make things very easy for both lenders and borrowers. Their terms for application for a loan stipulate first, that you must be above 18 years of age have an email address and a functional phone number, proof of citizenship and show proof that you have been employed for at least 90 days with at least $1000 of monthly after tax income.
Some of the reasons why you may like to sign up on and use badcreditloan.com include; the possibility of getting up $1000 loan with very bad credit scores, the platform helps you get offers by soliciting on your behalf and getting approval and the money wired directly to your account takes a considerably short while to go through.
Another option online is www.onemain.com which is also very popular amongst bad credit borrowers. The loans for this site range from $1,500 to $10,000 for rates between 25 to 36%. If you credit history or score is good enough, you may be able to get a higher amount.
How you can avoid scams for bad credit loans
Haven gone through the necessary criteria for determining whether or not you have bad credit and your alternatives to obtaining bas credit loans, i think it is only fair that we seal it all up by giving you tips and steps you can take to know and avoid bad credit loan scams. Usually, those on the negative side of the scale with their loans and need money are prone to scams because of their vulnerability. So look out for these warning signs to avoid them while you seek to obtain bad credit loans.
Watch out for unreasonable guarantees. Stay away from people who try to tell you it is possible to get a loan without knowing your credit history or other related information.
Secondly, avoid paying fees to fill forms or any such prerequisites.
If they are constantly contacting you or almost pressuring you into getting a loan, that’s a sign you are about to fall into wrong hands.
Demand for personal information. Until you have gotten enough details about the company you are dealing with, you have to be careful about giving out personal information. People who trouble you about personal information are most likely scammers.
In conclusion, when trying to obtain bad credit loans, you can get the best deals by looking up for companies or lenders with; Higher limits for loans, more reasonable fees, flexible terms, an extensive reach and a good reputation.