Do you have a bad credit history? Are you ready to turn your finances around? A bad credit personal loan can help you get back on track.
What is a bad credit loan?
A bad credit loan is a loan type available to consumers who have a low credit score. As banks tighten their lending, it has become really difficult for consumers to secure loans. If you have a low credit score, it will be even harder to secure a loan. Bad credit loans can help you get out of a tricky financial situation. So if you have a sudden payment that you cannot afford or an unpaid medical bill; a bad credit loan may be your saving grace.
Bad credit personal loans are available and have been so for years. Things exploded once the Internet was available to search for personal loans for people with bad credit. Nowadays, you can get approved for a loan within as little as 60 seconds. The funds for your loan can be in your account within as little as 24 hours with some companies. Of course, we don’t endorse jumping to conclusions too quickly, i.e. getting the first deal you stumble upon. Research is essential.
There are many options for people with bad credit. We will check out some of the best options that people with bad credit can use to get that much-needed funding.
Bad Credit Personal Loans – The Alternatives
Low Doc Loans
These loans have been designed for
1) self-employed people that can’t muster all the documents banks usually require in order to see if they qualify and
2) people whose credit ratings are on the low side.
If you take a low doc loan, your credit score won’t matter all that much. You just have to prove that you earn enough income to afford the loan. Low doc loan providers can be found all over the Internet.
Bad Credit Personal Loans Through a Home Equity Line Of Credit (HELOC)
If your credit score is disastrous, one of the few things you can do is try your luck with a HELOC. This way, you borrow money against the equity that’s available in your house.
The house will serve as collateral, so the lender won’t have any worries that you might default, considering that he can take your house if you do so. You, on the other hand, will lose some good sleep on this and you won’t feel in the least bit tempted to miss on your payments.
Bad Credit Personal Loans Through Credit Unions
Banks are steadfast when it comes to one’s credit score. They don’t care about peoples’ stories, no matter how impressive they are. Credit unions are much more humane in this respect. They give people a chance to explain themselves and the situations they’re in. A low credit score will affect the sum you can borrow, but it won’t cut your chances of getting a loan.
Secured Bad Credit Personal Loans
If you have any assets to your name, your salvation might come from using them as a security guaranty for a loan. Even if you are in a bad credit situation, banks and other lending institutions consider propriety to be an advantage and are open to giving loans. Secured loans make the creditors believe that you are trustworthy and you are not going to try to cheat the system.
If you don’t have any goods you can secure your loan with, you can still apply as long as you have a person you can trust, with a good credit situation. This person can be your co-signer and will assume responsibility if you fail to respect the terms of your credit.
Special Loans from Community Organisations
Depending on how you intend to use the money, you could qualify for a loan given by one of Australia’s Community Organisations. Usually, their loans are quite small but can be lifesavers in desperate times. Their interest rates are usually really low.
These allow you to borrow up to $2,000 and pay it back on your next payday. The loan term is typically a couple of weeks. Unfortunately, the interest rate is usually quite high. On the other hand, you are more likely to receive the loan, regardless of your credit score.
Other lenders might allow you to take similar loans for a longer period of time (several months). These short time loans can be used only one time, so you better consider using them as a last solution. Be extra careful when choosing your lender.
Loans From Your Family
Getting money from members of your family sounds like a very simple thing to do. However, if you’ve mismanaged loans in the past, they might not be too eager to give you money. Certainly, it doesn’t help to try. It’s a lot more comfortable to know that a missed payment won’t get you penalties. Moreover, you can always talk to your family and get them to empathise with your situation, which is impossible to do when you’ve borrowed money from a bank.
The Bottom Line
We know that having a low credit score is a nightmare and that being rejected by traditional lenders isn’t much of a good dream, either. We recommend you go to Bad Credit Loans and ask whether you’re eligible for a loan. We’re positive that you’ll find the best solution to your problems in there. Many people before you did, so you’re all set as long as you can prove that you can repay the loan.