It’s understandable to feel intimidated to get a loan, especially if you have bad credit. However, this shouldn’t stop you from trying. Many lenders require a specific credit score if you want to apply and be approved for a personal loan. For example, to qualify for the best financing rates, a credit score of 740 or above is required.
Although, many people can still seek financial assistance even if they have a terrible credit score. If you are one among them, there are options for you. Here are the easy ways to help you find a suitable loan:
Organize Your Credit Issues
If you don’t need a personal loan right away, you can concentrate on improving your credit first. Personal loans, such as credit-builder loans, are nearly ubiquitous. These loans help you build credit. You can borrow up to a certain amount, such as $1,000, but you must first repay the loan within a timeframe. Additionally, payments made on time are recorded to credit bureaus, which improves your credit score.
Other methods for improving your credit score include correcting any mistakes on your credit report, paying off your debts, making payments on time, and considering a secured credit card as a way to build credit. However, none of this will work if you need money right away.
Get a Co-signatory
Cosigning is another great way to get a personal loan with low credit. Someone with good credit may be ready to act as a guarantor on your behalf with the lender.
This not only makes them legally liable for payment, but it also makes loan approval much easier, as the lender looks at both of your credit scores. Moreover, a cosigner can often help you get a low-interest personal loan from your preferred lender.
Consider Borrowing as a Substitute
If you are unable to find a cosigner, a personal loan may actually be your best option. In light of this, you may want to consider a credit card with an annual percentage rate of 0%. If you qualify, you may be able to pay $0 interest for a limited time.
Furthermore, getting a credit card is far easier than getting a personal loan. On the other hand, credit card interest can be prohibitively expensive if you do not qualify for a promotional rate.
Talk to Lenders That Specialize in Bad Credit
If you need a personal loan right away, contact a bank or credit union you currently do business with. If you have a good relationship with them, they may ignore your bad credit and lend you money.
Numerous lenders specialize in personal loans for persons with bad credit. While the interest rates on these loans may be slightly higher than those offered to creditworthy applicants, a loan with fair terms is usually feasible.
Obtain an in-Person Interview
If your loan application is denied due to a low credit score, ask to talk with a loan officer. It is feasible to persuade them that earlier credit issues were caused by circumstances beyond your control and that they have been rectified.
It’s important to note, though, that this will not always work with lenders who have high expectations. However, it’s worth a shot, especially if lenders use manual underwriting or you have a compelling explanation for bad credit.
For anybody, applying for a loan may be a daunting task. This notion applies to almost any potential borrower, regardless of their credit score. Fortunately, even if you have bad credit, it’s definitely possible to find a suitable loan that could work with you. The viable step and crucial step, which you must take note of, is working with a lender who understands your situation.
Are you looking to apply for a ,personal loan? For more than 20 years, Mid-Town Finance has offered straightforward, fair, honest loans to the residents of Nashville that have made managing finances easy. No matter your credit history, there is something on the table for you. Call and inquire with us today!