Secure A Loan Even With Bad Credit

Secure A Loan Even With Bad CreditWhat is bad credit?

Bad credit defines a past failure to keep up with your credit agreements and the incapacity to get approved for new credit. It means you haven’t paid your past credit obligations on time, that’s if you’ve paid any of them at all. You may have had accounts sent to a collection agency, charged high balances, filed bankruptcy or had a vehicle repossessed. Bad credit usually occurs when these things happen several times rather than just a single time.

If you are in need of a loan but have serious bad credit ratings, obtaining a loan from a bank may not be the wisest choice as you will be rejected on the spot. The reasons banks do not lend money to individuals with bad credit is due their strict standards when it comes to evaluating the risk of lending to potential high-risk individuals. High-risk individuals have a great chance on defaulting on their loan and that puts lending institutions in jeopardy. Fear no! We have come up with a few ways someone could obtain a loan regardless of credit status.

Payday Loans

Payday loans, also called payday advance, salary loan, payroll loan, small dollar loan, short term or cash advance loan is a small, short-term unsecured loan. Loans are often referred to as ‘cash advances’. These loans are easy to qualify for even with a bad credit rating which makes it a practical option for individuals with bad credit rating.

How these loans work traditionally are, borrowers visit a payday lending store and secure a small cash loan, with payment due in full at the borrower’s next pay check. The borrower writes a post-dated cheque to the lender in the full amount of the loan plus fees. On the maturity date, the borrower is expected to return to the store to repay the loan in person. If the borrower does not repay the loan in person, the lender may redeem the check. If the account is short on funds to cover the check, the borrower may now face a bounced check fee from their bank in addition to the costs of the loan, and the loan may incur additional fees or an increased interest rate (or both) as a result of the failure to pay.

Credit Unions

Credit unions are fast-growing alternatives to banks, they are member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members. They also offer a range of savings accounts, current accounts and loans to their members.

These institutions are sometimes willing to overlook bad credit ratings especially if they are community based and make a decision based on other factors like your character and your promise to repay. They are sometimes thought of as small community banks from the old days.

Secure A Loan Even With Bad Credit Credit Picture License: LendingMemo via photopin cc

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