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From time to time, you may need to borrow cash, especially during those moments when funds are tight. However, getting credit is not always easy. Getting a personal loan when your credit score is not looking too impressive can get difficult. Banks are becoming more particular about their borrowers. They wouldn’t want bad credits to affect their bottom line.
A bad credit is often the result of a number of things that happened to you in the past. For instance, you may have missed repayments. You may also have a bankruptcy against your name. It should be differentiated from no credit though as this means that you have never taken out any loan before so you have no credit history.
Poor Credit Loans
Just because your credit score is muddied, however, does not mean that lender doors are going to be closed on you instantly. Many will still be able to offer you something although your options are going to be significantly limited. Your interest payments are likely going to be higher too since you will generally be considered a higher risk.
You will find lenders these days that specialise in offering loans to borrowers with bad credit. However, these loans do come with lower borrowing limits and higher interest rates. The greater a risk you are perceived to be, the more the restrictions and the higher the rates are. Of course, your credit history is not going to be the sole deciding factor on whether you will get approved for a loan or not. Your stability, job, salary, and even your assets are going to be taken into account too.
Different lenders will have different criteria on what they need borrowers to meet first before they are considered for a bad credit loan. It is common for them to require borrowers to be at least 18 years old and a UK resident to qualify. Also, you need to be employed or can show proof that you have a stable income coming in regularly every month.
Bad credit loans application process
Typically, bad credit loan applications get a decision within the day. How long it would take for the money to be reflected on your account, however, depends on how thorough and lengthy the approval process of the lender is. This would also depend on the length of time it will take for your bank to get your payments processed. Some lenders can even get the funds out in a matter of minutes. Typically, you can borrow as much as £50,000 though this would vary per lender.
While bad credit loans do come with high interest rates, this can be a good opportunity to build your credit score too. So, paying it off on time will help you get better loan rates next time.
Where to Get a Personal Loan for Poor Credit?
Back in the day, the only place you can apply for a loan is through a bank or a mainstream lender. Loans are usually difficult to get from these providers since they require good credit scores from their borrowers among other things. Now if you have poor credit, chances are, your loan application will not get approved.
The demand for poor credit payday loans was answered by non-traditional lenders who provide loan products to borrowers with poor or bad credit. These non-traditional lenders operate their business online thus cutting costs on operational expenses. Online lenders boast of flexible borrowing so you can have the best loan rates and terms for your particular situation.
Choosing a legitimate lender for poor credit
Although there are numerous legit lending businesses online, there are also those who prey on desperate borrowers who want to get immediate financial help. Some are lurking online waiting to scam naïve borrowers and there are also loan sharks who lure people into getting a loan with sky-high interest rates.
In choosing an online lender for poor credit, take time to research reviews and feedback online. Ask recommendations from people you trust in order to find a reputable online lender. Getting credit with poor credit is possible but there are certain requirements you should meet to qualify. An online lender will not focus too much on your credit score, but you must pass the basic requirements for a loan plus you should have a regular stream of income from employment or government benefits.
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