Personal Loan with Bad Credit or No Credit
Obtaining a personal loan with no credit or bad credit is difficult, but not impossible. Having bad credit used to mean automatic denials for a personal loan but things are different in these tough financial times. Many lenders realize that our current economic situation is making it harder and harder to keep stellar credit ratings. This makes it possible to obtain a personal loan with no credit or bad credit.
Before you apply for your personal loan you may want to check out your credit report and clear up any discrepancies. This is not necessary in many cases, but it may help to raise the amount of the loan for which you will qualify.
Since the lending companies consider bad credit loans a risk, these loans often come with high interest rates. Interest rates may range from 24.99% to 40% and maybe even higher. Many loans also include processing fees, so be sure to understand the full cost of your loan. You should be aware that some lenders have early pay off penalties. This means paying off your loan early may increase the cost of your loan. All of this information should be clearly stated on your loan contract.
Many companies will want to secure the loan. This means they may ask you to use a piece of personal property as collateral. Others simply consider your job as loan security.
To apply for your loan you will need solid proof of income. You will also need proof of citizenship, age and identity. The loan application may ask if you own your home, how much money you make and how long you have been on your job. The length of time you have been working for your most recent employer is very important to lenders. The longer you have been employed raises the level of credit for which you will qualify and may also affect your interest rate.
Once you qualify for your loan it usually takes very little time to obtain your money. If you don’t qualify you many want to check out your credit report and be sure it is accurate. Other things to help you qualify are having a co-signer, obtaining a letter of recommendation from your employer, providing collateral or providing stronger proof of employment history.
Applying for a loan is a simple task once you know what to look for. After you have gathered all the necessary information you can quickly and easily begin the qualification process even if you have bad credit.