If you are here, then you already have some ideas about bad credit personal loans and the shrouds of intrigue and mystery that surround their existence. People that find themselves in this delicate situation might believe that there is nothing that can be done in order to obtain a loan.
Well, we are here to show you that the situation is not as grim as it may look. Following this paragraph, you’ll see a display of myths that keep people away from getting a loan because they are not properly informed. This way, you’ll get to know what the truth is and what are just fabricated stories.
Myth no. 1 – Having a bad credit means you can’t get loans
Let’s start with this one as it is the most common thing people hear. Back in the days, having a bad credit meant that you had to say goodbye to any sort of loan. Luckily, we are past those days. Today, while it may come with some difficulties, getting bad credit personal loans is definitely not impossible. You will be able to get a loan even with a bad credit although some consequences will still be there, in terms of a higher interest rate, for example. If you managed to keep a good credit score for some years, then you will have a better chance of getting what you need.
You can even find lenders that work specifically with people that have a bad credit history.
Myth no. 2 – I need collateral in order to get bad credit personal loans
This one is kind of tricky. While it has some truth to it, you definitely shouldn’t just accept it as it is. Firstly, let us explain what collateral means so we know that we are on the same page. Collateral is something that a borrower might be required to put down as a guarantee in order to get something that is called a secured loan.
In layman’s terms, you need to put the banker’s mind at ease with something you own, like your house or your car. This way, when bad credit personal loans aren’t repaid, the lender can get something in return. So, we established that secured loans need collateral. But there are also unsecured loans and this is the niche you might want to tap into if you don’t want to put down a collateral. Just so you know, secured personal loans are easier to get when you have a bad credit but that doesn’t mean it represents the only option.
Myth no. 3 – Getting a bad credit personal loan gives you even worse credit
Sure, after you get a loan, your credit will take a bump or two initially because of credit inquiries and a higher reported credit balance. But if you manage to make your payments when they are due, and you stay on track, this fall will definitely not last.
And let’s get real for a sec. If you want to get rid of your bad credit, how can you do it without getting money? The best idea is to get loans and pay them back on time. The only condition is for you to be certain you can pay it back.
Myth no. 4 – You can only get bad credit personal loans from the bank
There is a thin thread of misguided perception wrapped around our social fabric saying that only banks are able to provide bad credit personal loans without unwanted consequences. However, some banks wouldn’t offer personal loans as quickly as you might need them. Despite this, there are other banks that wouldn’t want clients that come with a ‘bad credit’ file because they think that people with bad credit are great risks.
Does this mean that all hope is lost? Of course not, since you can always go to a smaller lender. You need to stay away from people with a bad rep, of course. But often, small bad credit loans are better than those offered by a bank.
Myth no. 5 – I don’t have a bad credit because I repaid my previous loans
While this might be the case for some people, bad credit doesn’t mean that only people with a history of defaulting can get it. It takes more than your payment history when your credit is calculated. Among those, we mention the credit limit, credit balance, credit enquiries and collection information. If a single one of the things listed above is faulting something, this can be enough for you to get bad credit. So, you need to ponder upon every financial aspect of your life before you decide on applying for bad credit personal loans. And don’t forget to apply carefully since the more failed attempts the higher the chance of rejection.
Hopefully, we managed to give you some perspective on what to keep in mind when looking for bad credit personal loans. If your mind is decided and you need a favourable loan, then we recommend Bad Credit Loans as it a great option for stabilising your financial future.