Having a history of bad credit can feel like a hindrance to your future financial health, with a low credit score an obstacle that may seem difficult to overcome. With traditional lenders stricter on their applicant requirements and who they lend to, for those with bad credit it may seem unlikely any further borrowing is possible. However, there are lenders online that are willing to help those with bad credit if you know where to look. Here are our 3 top tips to help you get a loan with bad credit.
Find Specialist Lenders
If you are someone that may have struggled financially in the past, it’s a good idea to seek out specialist lenders who can help you. When searching for loans for bad credit, you want to find those that are willing to accept a low credit score and provide the affordable terms you’re looking for. With specialist bad credit lenders, they will take the time to review your application and assess your finances. You may have been used to lenders declining applications straight away based on a poor credit rating, but bad credit lenders do not require you to have an excellent score. This way, if you have the affordability for the loan amount you’re seeking, you have a good chance of having your application approved. Rather than focusing on your financial history, they’ll look at your current finances and position as it is today.
Review Your Finances
As you will need to prove you can afford the loan, it’s a good idea to review your current finances to know exactly your current financial position. Start by looking at your sources of income and then your most important outgoings. If you can cover your essential bills and still have disposable income leftover, you can then work out a budget of what you can afford to pay each month with a bad credit loan. Whilst bad credit lenders are willing to help applicants with a less than perfect financial history, they can’t guarantee a loan will be approved, especially if you can’t show your affordability. By taking the time to look at your finances before applying, you can ensure you are in the best position possible. You may find you can reduce non-essential outgoings too to help your situation further.
Choose Repayments You Can Afford to Maintain
Once you have worked out your finances and found a specialist lender, you need to ensure that once a loan is approved you can maintain it. Choosing a repayment term that you can afford to pay each month is important, as that way you will know you can maintain it without any issue. The last thing you want is to be in a situation where halfway through the loan term you start to struggle, so determine how much you can comfortably afford and choose a repayment term that matches. If you can afford to do so, look to pay more each month where possible rather than choosing the longest term available. This way you can pay back the loan quicker and help to boost your credit score by settling the loan in full.
By following these tips, you should find getting a loan with bad credit isn’t as impossible as it may first seem. By not overextending yourself financially, you can then slowly build up your credit rating again for a healthy financial future.