Avoid the traps of these payday loans and go for bad credit personal loans. It’s saddening to see so many Australians restricted by their bad credits, but seeing the thrive of the so-called “Payday” loans makes us sick. A payday loan is simply put, a shakedown. Personal loans have small interest rates in defined periods. Meanwhile, the fees for payday loans start from about 15% annual, and the ceiling seems almost non-existent, reaching up to 400%!
This means that you’d have to pay $60 for $400, and this is only if you pay on-time. Paying late leads to additional charges. You might end up paying $530 for $400 in just one month. Save yourself from these sharks and go for a bad credit personal loan. They’re the best option for those with low credit scores.
The Pros:
- Personal Loans are Affordable: The interest rates for personal loans are usually lower, from as low as 7% to 15%, without the excessive fees of paying late.
- Easy to Repay: With a bad credit personal loan, you won’t have to fear hidden costs and fees. Contrary to the nature of payday loans, your personal loans won’t grow five fold over the span of 3 weeks.
- Conventional Debt Collection: A personal loan collector will go as far as calling you when you least expect it, but payday loan collectors resort to harassment, threats of litigation’s, and petty provocation.
The Cons:
- Can’t be obtained without Credit Cards: Some Australians don’t have access to credit cards, leading to a lack of credit history. Due to the strict regulations, they probably won’t be able of getting a personal loan.
Credit Unions: The Right Move
Don’t assume that because your credit history is undesirable you need to apply to a multitude of lenders. Doing so in a short time will ruin your credit history. Avoid the spiraled fall by limiting your choices to money lenders that specialise in bad credit personal loans. When your credit record isn’t so pretty, perhaps your best bet is to avoid banks altogether. Instead, why don’t you look for a credit union? Credit unions are owned by its members, not money-hungry shareholders. These unions provide lower fees than commercial banks, and they’re often more understanding as well. If you choose a credit union based on your employer or your community, you’ll find that they’re willing to look to the other side when it comes to your poor credit history.
A conventional bank will usually refuse any “potential risk”, but a credit union might decide to give you a shot. They’ll judge you and your ability to repay based on your character and your compromise. It’s a bit similar to how small community-driven banks operated years ago. You just need to find one that matches your terms and you’ll be on your way to getting your bad credit personal loan.
How to Get a Bad Credit Personal Loan
Each credit union is different and has varying requirements, but the underlying criteria remain the same, and it is not so different from the criteria used by banks either. Be sure to bring enough backing to increase the likelihood of getting your personal loan:
Proper Identification
You should have your personal papers in order before applying for a loan. This extends to your passport, Australian driver’s (or firearms) licence, proof of age card, birth certificate, citizenship certificate, health care (or pension) card, and council rates.
Income
It goes without saying that if you intend to get a personal loan, you have to be employed or otherwise receiving regular income. It’s not impossible but, if you’re going through the process of bankruptcy, you’ll face a harder time trying to convince a credit union to lend you money. You will have to provide evidence, so bring your payslips (or Tax Notice Assessment from the Australian Tax Office if you’re self-employed). A rental history might or might not be requested as well, so keeping one handy might help you. Most of the time, the lender will go over your financial statuses such as annual salary, employment history, and length of your current employment, although your community’s credit union might not go as far.
Credit Rating
So, your credit score is not pretty, but they have to check it regardless. Formally speaking, there are thresholds such as “good”, “average”, and “excellent” but when it comes to credit unions, an “average” credit rating might a “good” one. Each money lender has their own bar so don’t be afraid to ask.
Loan Amount
Don’t get carried away, your bad credit personal loan is meant to keep you afloat during the short term, not sink you with a long-term debt. Each lender has their minimum and maximum amounts, don’t be surprised if your request of $2000 gets declined. Start with something lower and work your way up!
Conclusion
If you have been struggling with credits and loans in the past, don’t stress! Try a credit union instead but do it right! If you’re still unsure about the process, contact Bad Credit Loans today for a good, free consultation to get on the path for a good credit score!
