Written by Stuart Henderson, Finance Today
As a rule of thumb, low credit score equates to bad credit. A bad credit rating speaks a lot about a person’s financial status and it makes getting loans from financial institutions a lot more challenging. Creditors will find it difficult to entrust their money to people with a bad credit rating but there are still others who will risk it.
Despite the challenges, bad credit rating loans are still available. Personal loans of up to $5000 are still possible even with a bad credit rating. Here are some tips on how you can qualify for a loan and still make sure you’re getting a fair rate:
1. Secure a copy of your credit history. Having a record of your credit history will help you and your potential creditors evaluate your options. Your eligibility for a loan depends on your credit history and having a copy of your credit history, albeit bad, will help you assess your situation.
2. Determine the least amount that you need to borrow. The larger the amount you borrow, the higher the interest rate and the shorter the repayment period. Remember that your bad credit score will result to higher fees. While interest rates for loans over $5000 are capped at 48% per annum, it is still a hefty sum to repay.
3. Take a very close look at interest rates and fees. A company that offers bad credit rating loans may charge very high
rates and include other fees due to the risk they are taking. You need to make sure that these rates and fees are fair
enough and within your ability to repay within the term of the loan.
Having a bad credit rating does not mean the end of the world for you financially. It will be challenge to get bad credit rating loans, let alone tackle the bad credit and cross over to a good credit score but it is not impossible. It is only a matter of wise financial decisions, even wiser spending and making sure that payments are made on time.