It is not easy to qualify for unsecured bad credit loans. Nevertheless, needs arise and you might require money for consolidating your debts, cover your tax bill, or pay for your car repair. When you are unable to pledge something as collateral, you might start thinking is there some other way to borrow money. Well, you can get an unsecured loan with bad credit.
Bad Credit Limits Your Option
When it comes to bad credit scores, your options might be limited and there might not be any attractive solution. However, you can take advantage of some acceptable solutions. In case you require money, you have to choose an option that is easy to move away from when you are back on your feet.
It is better to avoid unsecured loans as they have higher interest rates. Also, it is pretty difficult to qualify for it. Check if you have any collateral or not. Even when it is not equity in a house, it will encourage the lenders to give you some cash.
How to Get Unsecured Bad Credit Loans?
If you really have to borrow money, you can find some lenders that provide you money even when you have a bad credit score. However, this should only be available when there is no other option available.
If you follow the options given below, you will be able to get a personal loan with a bad credit score.
- Approach the Banks
You might have savings account in some bank or might have used their loan account or credit card in the past. If you have a good relationship with the bank, you can approach them. Even if you have a bad credit score at present, the bank might get ready to lend you a personal loan taking into account the good relationship.
- Approaching NBFCs
There are many non-banking financial companies that only ask for a credit score of 650 for their base approval. You can apply to such lenders where you will have a higher approval chance on the personal loan with a bad credit score.
- Get a Guarantor
If you have bad credit, you can get on board with a guarantor in the loan application that has a credit score good enough to get a personal loan easily approved. Nevertheless, keep in mind that the credit score of this guarantor is going to be affected when you fail to make payments for the loan on-time.
- Peer to Peer Lender
There are online lenders who will provide you with personal loans on the basis of your income. You will find lenders who do not check the credit score and you can easily get approval on the personal loans when you have a good income.
- Joint Loan with Family Member
This is just like getting a guarantor and you can get a personal loan by applying along with a family member who has a good enough credit score to get approval.
Debt Consolidation Loan
This is a form of debt that enables you to take a loan to pay off the existing debts. It will help in managing your credit issues under a single loan. There are banks that offer unsecured debt consolidation loans that you can get for managing your debts. When you repay the loan on a regular basis, you will be able to improve your credit score. This, in turn, will make you eligible for a loan.
You need to keep in mind that applying for too many unsecured personal loans with bad credit is going to show up on the report and further spoil the score. So, ensure that you can repay the loan.