How can I get a personal loan with bad credit? This is not an impossibility by any means, but you aren’t likely to have as many choices. Knowing that a loan is still a possibility is a great relief for many prospective borrowers.
There are challenges, as well as abundant possibilities that you’ll want to bear in mind when making your choice for a loan. Read on to learn more about getting a loan with poor credit and what you can do to improve things.
What Type of Credit Score is Ideal for Getting a Loan?
One thing helpful is bear in mind is that each lender sets its own criteria for lending. There is no one-size-fits-all credit score that applies across the board when you need to get a personal loan with bad credit. Lenders take risks when issuing loans, and one of the ways they mitigate that risk is by determining eligibility based on repayment likelihood.
A major factor that comes into play is how reliable you are in paying debts. Multiple collection accounts or late payments will make you look like more of a risk. You might need to take out a loan with different types of terms from what you were expecting, such as a smaller amount of money or a different repayment term.
When You Get a Loan with Bad Credit, What is the Best Option?
One of the most helpful things to know is that many lenders specialize in helping borrowers with bad credit get the loans they need. Whenever you are pursuing such an option, you’ll benefit from knowing the best options, not just the ones that seem best at a first glance.
Trying to eliminate or reduce your existing debt first is often a sound strategy. Making a plan for paying down all your debts, unless you use some of the loan funds to tackle existing debts, is a solid strategy to help regain your financial health.
What Are Some Easy Ways to Cut Existing Debt?
Even when you are in the market for a loan intended for borrowers with poor credit, taking steps to reduce existing debt, when possible, will help save you a lot of headaches. Paying down or paying off debt looks great for your credit score, and may clear the way for you to have the resources to pay your loan off faster.
One way to help reduce the amount of debt you currently owe is by paying a little more than the minimum balance. For example, if your monthly minimum payment is $35, try to go for $40 or $45 instead. Paying more than you owe helps your credit score and is a great practice to get into once your loan payments are due.
Make Sure You Account for All Income Sources
Many prospective borrowers make the mistake of thinking that only money earned from their job or government benefits counts. However, all income sources should be taken into consideration when you apply. Otherwise, you may miss out on getting the amount that you want.
Many people have side gigs to supplement their income, especially during times of higher costs. If these positions earn enough extra income, they could influence how much money you can borrow. When the company you receive payments from provides tax documents showing your earnings from the past year, these documents are helpful for showing what you earned.
If you have a business you own in addition to your job, any earnings from your business should also be considered when filling out your application. At CashLink, we want to make it as easy as possible for you to get a personal loan with bad credit, so contact us today to get started.