Bad credit doesn’t have to mean not being able to get a loan when you need one. In fact, there are plenty of ways for people with low credit scores to get funding. Even those who have been turned down for loans in the past will still have lots of options. When you spend some time looking into these options, you will increase your chances of approval. The fact is that bad credit isn’t as big of a problem as it used to be when it comes to getting a loan.
Take a Look at Your Credit
First you will want to see what exactly your credit is like. Everyone should look at their credit reports once a year, if for no other reason than to check for errors. It’s not completely unheard of for credit bureaus to make mistakes, and you could be negatively affected. Make sure there aren’t any items on your credit report that shouldn’t be there. By doing this you will also get a better idea as to what your loan options are. This won’t take very long and it’s well worth your time.
A Co-Signer Can Help
Those who can get a co-signer for their loan instantly increase their chances of getting approved. A co-signer is someone who agrees to take over payments of your loan if you cannot. The debt is automatically shifted onto the co-signer in the event that the borrower is unable to continue making payments. You will find that most lenders are willing to work with people who have bad credit if they have a co-signer. The person who acts as your co-signer must be reliable with at least a decent credit rating.
Take Out a Guarantor Loan
While getting a guarantor loan might seem like the same thing as using a co-signer, there are a couple important distinctions. A guarantor acts in the same capacity as a co-signer, but they are only called upon to take over the debt once the lender has exhausted all other collection options. Lots of people throughout the UK have had great success with getting guarantor loans, so it’s something you should think about. Take some time to find a lender who is flexible to boost your chances of getting approved for the loan you need.
Private Lenders Offer Easy Approval
One of the best ways for someone with bad credit to get a quick loan is to borrow from a private lender. Private lenders are known for having low standards when it comes to the credit ratings of applicants. Some lenders have made a policy of not running credit checks on anyone who applies. The lender might still look at your credit report to see if there are any big negative marks on it. Keep in mind that no legitimate lender will guarantee approval 100%, because it’s just not realistic. These lenders are usually based online, and they make it easy to get the money you need within a matter of hours.
Settling for a Higher Interest Rate
Sometimes people with bad credit can get a loan, but they have to settle for a slightly higher interest rate. A lot of lenders give higher rates to those they deem as liabilities, including people with bad credit. If you really need a loan, this could be a last resort option to consider. When you take the time to compare loan offers, you should be able to get at least a fairly good deal. If you have a long-term loan and improve your credit after getting it, you could refinance later on for a lower rate.
Credit Isn’t the Only Factor That Matters
When you are trying to get a loan of any kind, you will need to keep in mind that your credit isn’t the only thing that matters to lenders. If you have a stable job history and good income, the lender could disregard your low score. There are certain other criteria that can get you approved for a loan even if you don’t have good credit. A lot of people miss out on numerous loan opportunities because they don’t even bother applying.
How to Increase Your Chances of Approval
There are certain things you can do to increase your chances of getting a loan with bad credit, including:
• Look for flexible lenders: There are some lenders that are more flexible than others. Take the time to look for a private lender with a reputation of giving out loans to people with bad credit.
• Apply online: Applying online can help you to get approved faster so you receive the money you need as soon as possible.
• Find a suitable co-signer: If you have decided to get a co-signer or guarantor for your loan, make sure they have a good credit score and suitable income. You can save yourself a lot of time and frustration by picking the right person to begin with. The right person can virtually guarantee that you get approved for your loan.
• Don’t apply for more than you need: The lower the amount you apply for, the better your chances will be of getting approved. You should never borrow more than you really need, because it will only decrease your chances of paying it back on time.
What to Remember When Getting a Loan with Bad Credit
Make sure that you don’t submit too many applications with a short period of time, as doing so could damage your credit even further. The more time you invest in finding the right lender, you better of a deal you will get on your loan. Don’t give up on getting a loan just because you get rejected by the first lender you apply to. This process often takes quite a bit of patience, so you will need to keep that in mind. It’s a good idea to compare your loan options to decrease the amount you have to pay in total.