Qualifying for a loan nowadays can be challenging, whether you have a good or bad credit record. Individuals with a bad credit record have a much harder time getting access to loans. The truth is, with bad credit, your loan options are limited to some extent.
It requires a bit more patience and diligence to get approved for unsecured loans with bad credit.
What are your options for getting unsecured loans with bad credit?
Using a co-signer
A co-signer is an individual who applies for the loan with a borrower, promising to repay the loan if the borrower fails to do so. This individual needs to have a good credit record in addition to sufficient income to pay the loan off. If the co-signer can’t afford to pay the loan off, his/her credit will suffer.
Micro lending institutions
There are some lenders that specialise in offering unsecured loans to people with bad credit. It’s important to ensure that you only work with reputable lenders. You should expect higher interest rates. Make sure that you understand all the fees involved before signing any agreements.
Most micro lending institutions specialising in providing unsecured loans with bad credit require applicants to be at least 18 years of age with an active bank account. Applicants also need to provide some evidence of income.
Private lenders
By choosing private lenders you may get the benefit of better rates. Private lenders may be more lenient, compared to other lenders.
They may not place a lot of emphasis on your credit history and may offer lower interest rates.
While there are ways of applying for unsecured loans with bad credit, it always helps to work on repairing your impaired credit record. You can start by making all your payments punctually.
