5 Strategies to get Bad Credit Loans

By Angela Monroe - November 17, 2018

How to get a bad credit loan

Whatever your reasons for having bad credit, we understand that getting a loan can be stressful. At Loans for People With Bad Credit, we work with people on a daily basis who are trying to find the right loan, despite having bad credit.

The important thing to understand is that in most situations, you can get a loan with bad credit. We think it’s even more important to get the right loan for you, and to make sure that it fits with your financial situation and doesn’t risk getting you into further debt or damaging your credit rating even more.

Wondering how to get a bad credit loan? We can help you.

Consider your loan

Firstly, it’s important to think about the loan that you’re going to get and the reasons why you are getting it. You need to ask yourself whether you can truly afford to get the loan and to pay it back, on time and in full.

If you are in any doubt about whether you can make repayments on a potential loan, you should avoid committing to it. If you already have bad credit, you don’t want to risk taking on a loan that will strain you financially and that you may not be able to pay back.

It’s important to be patient if the loan is not urgent. It may be beneficial to you to wait until your credit rating has improved slightly, or until you have a more stable income before you apply for bad credit loans.

What are the options for getting bad credit loans?

In many cases, you will need to apply for a loan immediately and you will be doing this with bad credit. Don’t panic – there are options for getting bad credit loans, and many of these can be helpful in getting you back on your feet financially in the long-term.

1. Get a guarantor

Usually a close friend or family member, a guarantor will guarantee your loan for you. This means that they will make an agreement with the lender that if you default on your loan, they will take on the responsibility of paying it back for you.

Choose your guarantor very carefully, and always make sure that they are happy with their role and that they have sufficient funds that they won’t damage their own credit rating if they have to pay back your loan.

2. Offer a large deposit

This option isn’t available to everyone, but it can really help if you’re looking for bad credit loans. Having a large down payment or deposit will help you show your potential lender that you can offer them some kind of security on the loan.

A large deposit will also reduce the overall amount that you’ll need to borrow on the loan – which then reduces the amount of interest and fees you’ll pay in the long run.

3. Getting organised

If you have bad credit, it’s really important that you avoid any unnecessary delays when going through the loan process. Get organised early on and have all documents available for when the lender asks to see them.

You should be able to show proof of identification, proof of address, accurate bank account information, and provide honest and up to date information about your current financial status.

4. Budgeting

Before you apply for a loan with bad credit, always make sure that you have done some clear calculations and set out a budget for yourself. You don’t want to risk being unable to pay back your loan as this could damage your credit rating further.

Figure out what your monthly income and outgoings are, and how much you can realistically afford to spend on paying back your loan each month. Never stretch yourself financially and only borrow what you can afford to pay back.

5. Choose a secured loan

Some people with bad credit may have assets that they can use as collateral against a loan – this is generally referred to as a secured loan. Secured loans can include borrowing against assets such as your car or your home. This can help your lender to view you as lower risk.

You need to be totally sure that you’ll be able to pay back your loan if you choose to take out a secured loan. If you default on payments or are unable to pay back the full amount, you could risk having your assets repossessed and your credit rate worsening.

Ask for our help

We want to help you get a loan with bad credit. We understand that there may be a number of reasons why you have bad credit and we think that everyone deserves a second chance.

Don’t just wonder how to get a bad credit loan, get the process started today. Find out how we can help you with the entire bad credit loans process.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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