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Is your Credit Score >750?
Although the chances of bagging a loan with bad credit and without a guarantor are slim, there are still options. You can use your existing collateral to get a loan with bad credit. Following are some of the popular options.
Debt collection is the process undertaken by lenders to collect loan payments that are still due from the borrower's end. When you avail of a loan or a credit card, you would have to pay back the pending loan amount or your credit card balance on time.
Usually, an applicant with a bad credit score doesn’t get approved for a good credit card. Even if you get approved for a credit card, you wouldn’t get one of the best cards. Plus, the interest rates that you would have to pay will be very high.
Same day loans provide you with instant funds as soon as you go through the application process and if you are eligible for it. Lenders usually offer loans to people who have a good credit score. But there are other factors that are taken into consideration too, like your current income and repayment ability. To avoid loan rejections, it’s always better to check the eligibility criteria of the lenders before applying for same day loans.
A credit score has a direct impact on your financial health. Not all financial products are offered to everyone, banks or any other lending institutes will look at your credit score before making any lending decisions. Your credit score describes the risk associated with your credit profile. If you have a low credit score, banks will be hesitant to sanction your credit application as they would feel you are too risky to take a loan.
Bad credit can be burdensome especially when you need a fresh credit from a bank, and you are denied. It can be stressful to have bad credit in such pressing situations. To be honest there are no shortcuts to improving your bad credit score. But there is certainly a way to get relief if you follow responsible credit behaviour.
The purpose of consolidation loans is to repair your credit score. It is considered as one of the best ways to improve your credit score. When you have multiple credits and are unable to repay them on time, you can take out a debt consolidation loan and repay all of them. By repaying all the other loans, your multiple credits are closed positively with 100% repayment record. You will now have a single loan i.e. debt consolidation loan
Boosting credit score overnight is impossible as there are a lot of procedures followed in updating your credit activities. After finding that you have a poor credit score, you try to find out what has impacted your credit score. You may have outstanding dues to be paid to the lender, you may have incorrect data on your credit report, or you may have a settled or written off account, etc. Any one of these factors may have affected your credit standing.
A loan consists of two factors – Principal amount and Interest amount. The Principal amount remains the same for all the applicant irrespective of what their credit score is, but depends on their income. But what matter is or makes a difference is the interest rate, which majorly depends on your credit score. If you have a good credit score, the banks can trust your credit worthiness and your repayment capacity.
Lenders see individuals with bad credit as risky borrowers. Upon that, an unsecured loan contains more risk to the lender as there is no collateral involved. Due to this reason, the interest rate on unsecured loans are generally higher.
Lenders see individuals with bad credit as risky borrowers. Upon that, an unsecured loan contains more risk to the lender as there is no collateral involved. Due to this reason, the interest rate on unsecured loans are generally higher. To be honest, the chances are lower with banks who might reject your application.
Having a bad credit can sabotage your chances of getting a good loan. However, the chances are not completely ruled out. With the digital technology, you can explore the options. Following are some of the ways through which you can get a good loan even with a bad credit.
Getting a loan or credit card with bad credit could be quite a challenging task as the lender would expect a decent repayment ability from the borrower. However, the options are not completely ruled out. Following are the ways using which you can secure credit with a bad credit score.
All unsecured loans such as personal loans are hard to apply for with a low credit score. An unsecured loan means that you do not need to provide any collateral in the form of gold, property or other assets as security for the loan amount. This increases the risk factor for the bank or the Non-Banking Financial Company (NBFC).
The best option for unemployed people with a bad credit score is to go for a secured loan against gold or property. This is a quick process as you can approach the closest lender and pledge your gold or asset for a loan. This process is easy as minimal documentation is required for the loan approval.
12-month loans are now possible if you have a good income from a reputed company or if you have good social media profiles. Linking your Facebook, LinkedIn and Google profiles can get you a loan. Most 12-month loans are collateral free but can vary based on the loan provider.
You can get personal loans with a bad credit score, but they usually entail a high interest rate. The first option for a person with a bad credit score is to apply for a secured loan against gold or property. If you do not want a secured loan, then you will only be able to avail loans with a very high interest rate.
Fixing your credit score can take over 30 days of time or longer. The RBI has issued a rule that every Credit Information Company in India must give one Full Credit Report to every individual for free once a year! You can utilize this information from the report to check for any errors.
Any lender would normally pull your credit report and check your credit score to evaluate your loan eligibility. It could be difficult to get an instalment loan with bad credit. However, the options are not ruled out.
If you have a house or a piece of property, you can use it as collateral to get a secured loan. The interest rates on secured loans are usually lower than personal loans but can be higher than normal if you have a credit score under 600.
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