Did you know that your credit history could be used against you when you are trying to get an installment loan? Beware that creditors do not leave any stones unturned in trying to understand what kind of a borrower you are.
If you are building credit for the first time, poor credit may prevent you from getting your loan approved by most banks. The long procedure too may leave you stranded in case of an emergency. Do not be discouraged though when this happens to you as there are other alternative ways in which you can get an installment loans for bad credit.
How reliable is your income? Do you get a steady paycheck at the end of the month but need an emergency loan? Use a low interest equity line of credit if you are disciplined to pay it down on time. This means you spend less even if your credit score may be low.
You can opt for a credit union to give you an installment loan for a bad credit due to its leniency compared to banks. It is a non-profit organization approves your installment loan faster compared to a bank. Here, you get your loans at a lower fee. Just like in a bank, you are required to provide collateral or a cosigner so that the credit union has something to hold on to in case you do not repay your instalment loan.
You can borrow from peer to peer lending sites such as:
These online platforms let you borrow from people directly rather than going through an institution. Getting a bad credit installment loan not only benefits you as the borrower but also boosts the investor. You get low interest rates of repaying your loan as the investors earns high rates of interest.
Just post a loan listing including the desired amount you wish to borrow giving reasons why you wish to apply for an installment loan. Do not forget that your credit score should be part of your loan listing. The investor considers all these factors and becomes empathetic to approve your installment loan faster than a bank would.
Borrowing from friends and family can be tricky if there is no written documentation outlining the terms and conditions for the bad credit installment loan. If you are not able to pass an investor’s criteria, approach a friend who can lend you the money in form of a written agreement that clearly outlines the terms of payment, interest rate and what collateral covers the installment loan in case where you do not stay true to your word.
This agreement should be legally recorded stating the consequences of not repaying the loan as agreed so as to avoid family conflicts. Treating bad credit installment loan from a friend as a business transaction prevents losses from either parties involved.
A person with good credit could help you get installment loans for bad credit. By cosigning a loan with you, they strongly believe that have the capability of repaying the loan. The cosigner understands that if you default from the agreed terms and conditions, their credit score also goes down with yours. Though risky for them, get someone who understands your situation and has strong faith to cosign an installment loan with you.
If you are struggling to get an installment loan due to bad credit, this could be caused by lack of clearly understanding your credit score. Installment loans for bad credit direct lenders consider your Fico scores to determine if you will be able to repay an installment loan. They give lenders a history of how you manage debts and how you have been using credit. Get your credit score from your bank or sign up for a company such as CreditKarma.com to keep track of your credit score.
Try to improve your credit score so that you can qualify for an installment loan. You can start by correcting any errors that may be affecting your credit score on your credit report. Always ensure that you pay your bills on time and avoid credit card extensions so that your credit score goes higher for you to qualify for a loan.
A secured loan lets you offer an asset such as a car or your home as collateral. This helps boost bad credit in order to appeal to a lender. Giving the lender your car’s logbook to hold as collateral assures them possession of the car in case you fail to repay an installment loans.