The credit defaulters are not allowed to get funds from the conventional lending institutions due to the bad credit history. It is because the standard financial companies cling on the standard rules and do not temper with them. In such situation, they need other options to utilise. Thus, many online lending companies offerthe exclusive financial products for such people on the subprime policies on poor credit loans like no credit verification, no need of broker involvement, no necessary guarantor needed and no collateral submission if the amount of the loan is lower and at last, the immediate approvals.
More information on poor credit loans:
Poor credit loans are useful for people, who have made recent credit mistakes or past credit mistakes. People, who are willing to write off their remaining dues, can even get such loans to help out themselves to come out of the adverse financial solutions.
Who can qualify for bad credit loans?
A person, who has bad credit history and not impose with the CCJ (County Court Judgment) or IVA (Individual Voluntary Arrangement), means a person who does not have the very bad credit history, can apply for such loans without any restrictions from some direct lending institutions. The borrowers must have the residential status of the country and the age must not below 18. The borrower must also earn a stable income status from a part-time job or full-time job. The business income can also be accepted, even from a start-up.
Procedure to apply for loans with bad credit:
When applying for a loan from the offline mode, a person needs to visit to the lender and follow a lengthy application procedure. To reinstate the offline mode to online for saving the time and efforts, the person has to fill an online application form and then submit it to the direct lender, which comparatively takes lesser time. After that, the lender confirms whether the credit application is suitable or not.
Note: Always apply for any loan after reading the terms and conditions of the lender as the policy of one lender differs from another. Some lending companies do not allow people with bad credit history to avail the loans. One more suggestion is that always check your credit score before applying for a loan so that you can match your credit ratings with the eligibility criteria and to judge whether you should apply or not. If the borrower does not do so then his credit profile can lose the credit worth in the financial market, as the negative strikes fall on the credit report.
Loans for poor credit- Types, Interest Rates &Suitability
Loans for poor credit are short term loans, which are of two types, basically of secured and unsecured. Most of the bad credit record holders apply for short term unsecured loans, as they do not want to deposit their assets due to the risk of sell out of it in case of no repayment or you can say when they need smaller principal money in the emergency. Under secured loans category, loans can go farther than the short term if the collateral value is higher. People, who fail to deposit the higher valued collateral, get the smaller loan and with comparatively higher interest rates. It happens because of the adverse financial conditions of the borrowers.This is the reason why poor credit loans are generally small term loans in nature.
The interest rates on bad credit loans are higher because the lender cannot trust fully a credit defaulter. Under the secured category, the interest rates might be lower but not than the general interest rates. Still the interest rates are higher because of the poor credit record.
These loans are suitable only if a person is in the urgent need for the funds, otherwise a person must avoid to take such loans by considering the fact that paying them back on the time would be difficult. It is because the failure of repayment can only put burden on the borrower of getting more negative credit hits.
If you have a bad credit history today, it does not mean that you are getting poor credit loans just to secure yourself for a day. You must reimburse money on time to the lending company and improve your credit scores to make a sound credit career from now.