How to get a personal loan with bad credit?
Any credit score of 750 and above is considered a good credit score. Don’t panic if you do not have a credit score less than that. The lenders do consider lending if you have less than a credit score of 750. Following are some of the options using which you can get a personal loan with bad credit.
Approaching Banks: There must be banks where you have a savings account, use their credit card or had a loan account in the past, etc. You may have had a good relationship with the bank with respect to your transactional activities. Though you now have a bad credit, the lender may agree to lend to you a personal loan, considering your valuable relationship.
Approaching NBFCs: There are several Non-Banking Financial Companies (NBFCs) that require only a credit score of 650 and above for base level approval. You may apply through such lenders wherein you have higher chances of approval on personal loans with bad credit.
Peer to Peer Lender: These are online lenders who provide personal loans based on your income. Some of the lenders do not check your credit score and you can easily get approved on personal loans if you have good income.
Get a Guarantor: When your credit is poor, you may onboard a guarantor in your loan application whose credit score may be well enough to get easy approval on the personal loan. However, you must remember that the credit score of the guarantor will get affected if you fail to make on-time repayments on the loan.
Joint Loan With Family Members: Similar to a guarantor, you can also get a personal loan by jointly applying with a family member whose credit score can be used to get approved.
If you are unable to get a personal loan through the above options, you may have to first repair your credit and begin to apply for a loan in order to prevent a rejection which can further reduce your credit score.
Debt Consolidation Loan
Debt consolidation loan is a new single loan that is taken to pay off your several existing loans. This is a very helpful option especially when you are unable to manage several loans with regard to repayments, interest rate and delinquency.
Your multiple loans such as student loan, personal loan, credit card bills etc., with different lenders can be paid off at one with this new loan. Instead of paying 5 or 6 times, you are giving out the same amount in a single payment to the new lender.
Debt consolidation loans help improve your credit health considerably after making consistent repayment. It is the best option to go for if you want to get out of debt sooner and change your bad credit history to good credit history.
You can check out for lenders who offer these loans exclusively for people with bad credit history. Though a debt consolidation loan is generally an unsecured loan, certain lenders may demand collateral if the loan amount is higher. Moreover, some lenders provide only up to a certain percentage of the overall amount required for closure of all loans. The rest has to be borne by you.
Banks and Online Lenders Offering Unsecured Loans for Bad Credit
Finding a lender who provides an unsecured loan for bad credit can be a challenging task. To make things easier, we have listed out the lenders who are willing to offer unsecured personal loans or debt consolidation loans for bad credit.
To know more about Unsecured Personal Loans For Bad Credit