Having a bad credit or poor credit rating might put you in a difficult spot. If you are having a bad credit score, finding personal loan can be tricky but not impossible.
Personal loans are definitely the most ideal option if you are planning to finance a big expense, consolidate any debt or are desirous of saving yourself from high interest bearing credit cards. In case you are having a bad credit score and are in desperate need of personal loan, you need to follow 5 most useful tips as enlisted below:
Find a lender you can trust
There is literally a flood of lenders in the market that offer you with attractive loan options, however not each of such lender would prove to be your ally in times of distress. Basically, an individual with a bad credit needs to find a transparent lender who is upfront about loan fees, interest rates, repayment options and even offers certain flexibility in terms of prepayment options.
Try getting a loan through a known bank
The best and the most hassle free way of securing a personal loan is by taking advantage of the loan facility given by your own bank. A bank with whom you deal with on daily basis is pretty much aware about your cash dealings and balance and even if you are scoring less on your credit rating, there is all likelihood that it would advance the loan amount you require.
Information is imperative
If you are having a bad credit and the bank is still willing to advance you a personal loan, we suggest you to dig deep into the terms and conditions with which such loan is being offered. Always keep in mind that information is power and you need to prep yourself up with all documentation requirements even before the bank calls for it in order to avoid last minute confusion.
Inquire about origination fee
Most of banks and credit agencies charge origination fee, also called service fee on personal loans which is deducted from the loan amount. This means, you’ll be getting the net amount after origination fee is kept by the bank with itself. So, in order to avoid any confusion later on, we suggest you to inquire about the %age of origination fee that bank charges on personal loan amount.
If not getting a personal loan is giving you sleepless nights because of a bad credit score then, we suggest you to get creative. Try using a home equity line of credit if you have a reliable income source and are disciplined about paying the installments. Another option can be to borrow through credit unions. Credit unions are basically non-profit organizations that work on similar lines as banks, only difference being they are managed by members who work for a similar cause and extend earnings of their members to the ones who need it at fairly lower interest rates as compared to banks.