Not everyone has a clear credit history. Whether we like it or not, our financial situation has its ups and downs. There are times where you do not manage to gather all the money for your monthly payments, and you struggle with high-interest rates.
In Australia, one out of five people has bad credit, which means they encounter difficulties, especially when it comes to applying for another loan. A bad credit score has the potential to emotionally and financially impact your life. If you or your company has a bad credit history; consider a bad credit loan. In fact, bad credit loans may be what stands between you and bankruptcy. If your company has a plethora of loans that it sometimes fails to pay; do not be discouraged. You may still be eligible for a bad credit loan.
Whilst traditional banks may decline your loan application; alternative lenders such as bad credit loans, have come up with options for every borrower, including ones with bad credit history.
Here are some of the advantages provided by bad credit loans.
No Credit History Check
One of the greatest benefits offered by a bad credit loan is that your credit history will not be taken into consideration. This means that when the lender evaluates your application, they won’t be looking at your credit score since previous defaults or listing may not affect or loan application.
The lender’s main interest will be to see if you have a steady job or sufficient income to pay your current bills. You should also have assets that can cover the requested loans. To raise your chances of approval, it would be better to have a stable job for one year.
They Can Improve Your Credit
Bad credit loans offer you immediate access to the necessary funds to pay off your debt. Secondly, you have the chance to manage your financial situation responsibly and make the payments on time. Through budgeting and responsible debt management, you will be more inclined to improve your credit score. In the eyes of an employer or potential lender, you will be more trustworthy.
You Can Borrow Large Amounts Of Money
Among the advantages of bad credit loans, you will find that you can request large amounts of money. Yes, even if you have bad credit, you can still apply for something quite substantial. The important thing is to be able to pay it off and have an income that covers the monthly payments.
Another aspect that people should take into consideration when applying for a loan is the hidden costs and fees associated with the loan. Make sure that you always ask lenders about any additional fees.
They Are Flexible and Offer Variety
No one has the same problems and the same needs. For this reason, bad credit loans can be molded according to your needs. The right lender will offer a tailored loan that is specific to your needs. They may factor the amount of the loan, repayment plans, term, flexibility, interest rates and so on.
When choosing the right bad credit loan, it is important to be sincere with yourself. Accurately explain your financial situation to your lender and ensure that they are completely aware of your financial state. Also, do not rush and take your time when choosing the right offer that suits your needs, or you risk to worsen your bad credit history further.
Secured or unsecured loans
When choosing a bad credit loan, there are two options that you may consider. A bad credit loan can be secured on an asset that you own, such as a car or house. The lender will liquidize your asset if you have too many missed payments. The advantage of this type of loan, compared to the unsecured one, is that the interest rates are lower.
If you apply for an unsecured loan, you won’t risk any assets, but there are other disadvantages that your pocket will feel when you make the monthly payments.
You, Will, Get the Money Fast
Do you need cash ASAP? Are you low on saving and you have other debts slowly creeping up? Coupled with a bad credit score, it may seem like all hope is lost. Fortunately, you can still get a loan. You can, in fact, get a bad credit loan really quick.
Bad credit loans are the fastest loans to secure. For example, a payday loan which is an unsecured type of loan can be secured within a few hours after application. Although you shouldn’t wait until your financial situation gets critical to take any action, bad credit loans could be a way out if you ever find yourself in such a difficult position.