Credit Repair

Is It Possible To Obtain A Bad Credit Personal Loan?

Many local and national chain banks along with other financial institutions these days offer special bad credit personal loan programs for those who have negative FICO score because of some reason or other. Though these kinds of programs are a relatively new kind of offering, the point is that such options are available out there in the market. Therefore, if you need money and are looking out for a personal loan but do not have a good credit score, you can try these options. The only drawback with these loan programs is that they charge a comparatively higher rate of interest, and the reasoning behind this is simple; by offering a loan to you a person with bad credit, the lenders are actually taking a higher risk. However, you can still qualify for a low rate loan, especially if you are willing to take a secured personal loan, where you will be required to put something as collateral against the money you borrow. Following are some important points to consider in this regard.

Find Lenders That Offer Such Programs

When it comes to obtaining a bad credit personal loan, the first thing you have to do is to find out those banks and lending institutions that offer such special programs. Most repudiated, larger banks are likely to reject your application straightaway. Therefore, you are advised to focus your research with smaller banks and credit unions and other private lenders. You can start by checking with your current bank, where you have a savings or checking bank account. If you have your accounts active in a specific bank for several years and have always received your monthly or weekly salary in a timely manner, the bank may give you some privilege for your relationship with the bank. Other factors will also play an important role here, such as whether you have ever bounced a check; if not, it will work in your favor. Alternatively, you can also research your options with other non-traditional financial institutions; in the personal finance marketplace, many of them have now become key players.

Get A Co-Signer

Another easy way to qualify for a bad credit personal loan is to ask someone with good credit history to act as a co-signer. It can be your spouse, your parent, any other family member, a friend, a colleague, or just anybody. If you are lucky to have someone who trust you and is ready to act as a co-signer, there can be no better option to get a personal loan with bad credit history. This way, you can even qualify for a low rate loan because the interest rates in this case will be determined on the basis of the credit history record of the co-signer not yours. Just make sure that you are financially able to make the repayment in a timely manner because if you fail, the co-signer will be liable to make the repayment. The co-signer will be the one who will be receiving the collection calls, not you. That is the reason why it is usually very difficult to arrange a co-signer. Anyways, this is still an option that you may like to think about.

Put A Collateral

Another great alternative to get a bad credit personal loan is to offer a property as collateral against the money you borrow. This is called secured personal loan, where lenders do not even check your credit provided you put something valuable (that you own) as collateral. This way, you can even qualify for a low rate. But again, the drawback with this option is that you are actually putting the property that is being used as collateral at risk. If you fail to make the repayment, the lender will sell off that property to settle the debt from the proceeds thus received.

Overall, as you can see, there can be an array of options that can help you obtain bad credit personal loan. It is up to you to decide which of the options make the most suitable choice in your specific case.

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