How to Get a Cash Loan with Bad Credit

Posted: 17th January 2020 16:26

Finding the cash when you need it can be difficult if you don’t have the savings available. If you need to find lending options that won’t cost you too much in interest charges, you should definitely shop around. But what happens if you have bad credit? Can you still get the cash you need cheaply with a credit score that’s seen better days? In short yes, but this heavily depends on where you look and what type of loan product you need. Whether it’s a mortgage, personal loan or credit card, the good news is there are some great options available if you do have bad credit.

What Restrictions Do Bad Credit Cause?

The biggest obstacle with having bad credit is convincing lenders that you can afford the repayments you want. Even if your current affordability is plentiful, if your credit history shows instances of poor credit management, missed repayments or even court orders, it doesn’t paint a positive picture of your reliability. Because of this, many lenders will not entertain the idea of lending to you whilst your credit score is very low. If you think you have bad credit but are unsure of what the reasons for this are, we recommend if you haven’t already, to check your credit report. By looking at your current credit score, you’ll quickly be able to see what a lender can when assessing your loan application.

Knowing Where to Find Bad Credit Lenders

Once you have established if your current credit score indicates bad credit, you’ll need to find the right lenders to approach. There are many lenders willing to offer cash loans to bad credit applicants, you just need to find them. The easiest way to do this is by using a broker who will be able to search the market and show you the available options for you. This way they can filter out the options that are not going to help you, and show you the lenders you should look into. The difficult part is finding lenders that can help but are following the correct lending guidelines. You should only use lenders that are recognised as trusted and you can use tools such as the Better Business Bureau to find them inside the US.

How Do Lenders Offer Cash Loans for Bad Credit?

The way it works is a lender will look at not just your credit history but will focus on what you can actually afford. If you can afford the repayments for the loan you want and have plenty of affordability, this will weigh in your favour. Bad credit lenders may offer higher rates of interest because of this though, so you’ll need to ensure you’re happy with the terms being offered to you. This is where using a broker can be particularly handy in this situation. For example, if you’re looking to apply for a mortgage with bad credit, a broker will have specialist knowledge to help someone on your position. Compare this with applying online with no further insight; you might find the largest lenders use automated systems. This means if you do not meet certain criteria it will decline you without any further context.

It is in a broker’s interest to help you find the credit you need, so using one will be more beneficial, especially when it comes to applying for secured loans like a mortgage. Anything of a higher value that you are attempting to apply for with bad credit, you should look to get the relevant help and advice to aid you.

Honesty is the Best Policy with Bad Credit

Like with most things in life, being honest about your situation is usually the best course of action. Being aware that you’re in a bad credit situation and advising this to lenders that you approach can make a difference. The biggest benefit of doing so is a lender will be able to fully understand why you are in a bad credit position. For example, if you have a CCJ or IVA against your name, by explaining what happened to cause that, and by showing how your situation has improved or that you’re taking steps to improve it, will reflect well on you.

Additionally, you should avoid sending out multiple applications at once. By doing this, it will effectively put a strain on your credit report, causing your score to suffer because other lenders can see you have applied for lots of borrowing in a short space of time. With a combination of working on improving your credit rating, being honest about your situation and using trusted lenders, you should find the help you need even with bad credit.