Emergencies come knocking at the door when we least expect, but funnily, we always need to be ready to face all kinds of challenges. That is life!
But arranging a lump sum of money at beck-and-call is indeed difficult. The only option emergencies leave us with is applying for a loan. Then again traditional money lending is time-consuming. So for quick approval of a loan people choose personal loans. But a bad credit score makes it complex and sometimes the effort is futile.
Why is credit score important?
A credit score is like an assurance and a probability of your paying back the loan amount. High numbers indicate the companies are ready to approve your loan and also the interest will be less.
The lesser the number is the riskier you are considered to be given a loan and also it means increased interest. The count of the actual numbers depends on lender to lender. However, these scores are subjected to change with the transactions of future loans. Once your credit score is improved you are back in the game. Making credit payments online and utilizing the available credit intelligently can help you increase the score within the duration of only 3 to 6 months.
What is the way out?
So if you need money now even with bad credit it will not be all disappointment for you.
The secret is to follow the right track and direction. You need to identify the right credit loan for you. Though the option remains limited, bad credit loans are indeed available. It is a kind of personal loan that rescues you from emergencies even with a score of 650 that the banks would never approve of.
Unlike the traditional loans that check your credit score and other records with the banks, these loans are pre-approved and also go by the term no credit card check loans. Some most popular ones are payday loans, cash advance and title loans. Ditch the traditional loans are there are end numbers of perks of these loans:
- Credit score check: Typically a cash advance loan does not require any credit check. But it depends on lender to lender.
- Plenty of options: There are options to borrow money from payroll, retirement accounts, borrowing money from life insurance etc.
- Flexibility of choice: There are multiple lenders so you can choose the perfect one according to your credit card debt and rate of interest.
- Paying is easy: Pay the money back in fixed monthly instalments. In case of payday loan and cash advances, the amount is normally deducted from the next salary.
- Interest: If one can get a loan on a bad credit score then the interest is comparatively low than traditional ones. However, being a risky investor sometimes you can be charged with high interest known as rewards. Read the documents carefully to be aware of the processing fees and penalties.
- Approval: Eligibility criteria for these loans are also flexible.
- Time: These types of loans are faster to get and the repaying time duration can also stretch depending upon the lender.
- Asset: Unlike many traditional loans in this case credit history of the list of asset is not required.
In any way, if a loan is denied because of low or bad credit score the applicant can approach the credit union for a personal interview where they can convince about their worthiness to repay the loan. In this case, keep the necessary documents ready.
There is one thing to be cautious about before taking a loan with a bad credit score that is being aware of the fraudulent money lenders. In desperation to seek monetary help, we sometimes tend to forget about being rational. The advancement of technology makes life easier but also risky. Applying for loans online seems to be an easy solution for people with a bad credit score but giving access to your personal data to a stranger may not always provide favourable result. Also, not all companies have a valid license and are not certified money-lenders.
In case of emergencies look for other options like peer to peer money lending, borrowing money from friends or family, get a co-signer who has a good credit score.