Getting A Loan with Bad Credit

Needless to say, lenders will be selective when it comes to approving loan applications. They do background checks and thoroughly review credit scores to make sure they’re lending money to capable borrowers. However, due to different circumstances, some fall off the wagon, falling under the bad credit category. If this sounds like you, don’t fret! There are still options on getting a loan even with a low credit score. Read on to find out!

What are bad credit loans?

When you have low credit—or no credit at all—and in need of a personal loan, applying for a bad credit loan is the most viable option. A bad credit loan is a form of personal loan specifically catered for those who have a less than perfect credit score, and it can bail you out of a financial emergency. Whether you need it to pay for hospital bills, funeral expenses, or to consolidate your credit card debt, bad credit loans in NZ can help. Much like personal loans, the money you borrow is paid in fixed, monthly instalments.

What are the advantages of bad credit loans?

Fast – bad credit loans have a quick and easy application process wherein your application will take minutes to complete and just a few hours before a representative respond. In most cases, money gets credited to your account within 24 hours.
Lower interest rates – bad credit loans can offer lower interest rates compared to the interest rates you pay on your credit card.
Longer loan length – bad credit loans have flexible repayment terms that can stretch anywhere from one to five years.
Boosts credit score – when you consistently make on-time payments, your credit score will improve, upping your chances for better loan terms the next time you borrow.

How can I get a bad credit loan?

Since big banks stick to traditional credit score ratings to assess you, you may have limited borrowing options. However, you can still get your loan even with bad credit.

Get a co-signer – If you know someone with good credit, you can talk to him or her about co-signing on for a bad credit loan. As co-signers, you can get better loan terms as it will be based on their credit score, who will then be equally responsible for repayment. If you make timely payments, you will lift your own score making it easier for you to obtain future loans even without a co-signer.
Secured loans – If you own a house of a car, you can use your assets as collateral. You can obtain a loan with your collateral regardless of your credit score.
Online personal loans – Lending companies have opened an opportunity for people with low credit scores to obtain personal loans when banks turn their backs on you.

In emergency cases where there’s an urgent need for a loan but you have poor credit, you may seek help from a trusted loan company who offer bad credit loans. They can give you loan options specific to your situation. If you do decide to apply, make sure you’re prepared with documents to back up your creditworthiness. If you’ve lived in the same residence for years and have worked the same job with a stable source of income for several years, you’ll be more likely to receive the help you need.

If it’s not an emergency, the best thing you can do to get a loan is to start improving your credit score to afford the loan you need to borrow. Start by making on-time payments, reduce the balance to under 30%, and don’t apply for any more credit! The combination of these will bump your credit score little by little, making you a better candidate for any type of loan.

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