Getting loans with bad credit can be a challenge. Credit providers aren’t likely to provide access to cash to individuals who have a bad history with regards to repaying loans. While it may often seem impossible, the truth is that there are ways of overcoming bad credit and getting access to the cash you need.
Loans for bad credit are available and there are a number of things to consider before applying.
Lenders take a number of factors into account when they consider your application for a loan.
Your affordability as well as your individual creditworthiness are important factors. Legitimate lenders will never grant loans to individuals who are over-indebted.
Your credit score is important.
It’s a measure of your creditworthiness that lets creditors know how well you’ve paid in the past and how much credit you’ve had. If you have bad credit you should work on improving your credit score. In South Africa, you are entitled to one free credit report a year. Make an effort to request your credit report and to get any errors fixed. Be careful about applying for various loans. Try to avoid having your applications having a negative impact on your credit record.
Be prepared to deal with high interest rates.
One of the main drawbacks of bad credit loans are the high interest rates. This offsets the risk taken on by the lender.
You need to submit proof of employment and income.
When applying for loans for bad credit you need to provide proof that you can afford to repay the loan.
You have options
You could opt for a home equity line of credit or credit unions. You could also opt for a peer-to-peer loan or for a loan from family or friends. Another option is to appeal to a co-signer.
Apply only to registered credit providers.
Make sure that you apply for loans for bad credit only from reputable lending institutions that are registered with the National Credit Regulator (NCR), which are also fully compliant with the National Credit Act.