Getting a loan when you have bad credit

Sep 04

Getting a loan when you have bad credit

As you already know, your credit history reflects your financial management capabilities. This is something that builds up over time. When your credit history is poor or bad in general, getting a personal loan becomes difficult. Well, one thing is certain. If you have a stable job and you are able to provide a proof of it, then you won’t experience much problem getting a loan with bad credit.

Today it is very rare to see financial institutions like banks giving out loans to unemployed individuals. You have to fulfil certain terms and condition before your application can be approved. Other financial institution and private lenders will not hesitate to give you loans because they are aware about the global financial crisis that we all are facing. Finding such lenders or institution is not really easy. But no worries as there are ways to get loans with bad credit.

The first suggestion to get a loan with bad credit is to find someone to sign for you. In other words, you need a co-signer. A co-signer is someone that can stand for you or someone the financial institution or lender can hold responsible if you cannot meet up with the repayment. Finding a co-signer is not really easy. Only a person who loves you can actually take the risk. Notwithstanding, it is an easy way to get a loan with bad or no credit. So ask your friends and relations with good credit records if they could be your co-signer. Explain to them why you have a bad credit history. You never know who is willing to help.

If you are unable to get a co-signer, the next option available for you is to get a secured loan. This is where you get a personal loan by securing a personal asset as collateral. Many banks are ready to accept your application for a secured if the asset you provide is worth the amount you want. If you fail to pay back on the agreed date, the lender can sell the collateral and recover some portion of the loan amount. Acceptable asset for secured loans for bad credit history are cars, houses, property and other valuable items like highly priced jewels. If you are willing to provide any of such valuable items as collateral, then you have no problem securing a loan with bad credit.

If getting a secured loan seems to be difficult for you, then the next option will be to apply for an unsecured loan. These types of loans are also known as high risk loan. These loans are risky proposition for both parties, that is, you and the lender. Unlike normal loans, they are given with a higher interest rate. Also, lenders do not request for any form of collateral against the loan. Unsecured loans offer you an opportunity to improve your credit score if you can make the timely payments to the creditor. To qualify for this type of loan, you will be required to submit your social security number and a copy of your salary slip. It is very easy to apply for an unsecured loan online. All you need is a good lender.