Getting a Personal Loan with a Poor Credit Rating

There are more personal loans available for those with a poor credit rating than in the past. A bad credit rating can make it difficult to obtain a loan through traditional channels, so individuals with a poor credit rating look to lenders who specialize in offering loans to people with bad credit.

What Is Considered a Bad Credit Score?

A FICO score of 580 or lower is a bad credit score. A FICO score of 580 to 619 is a low score. With a credit score in this range you will need a lender specializing in a personal loan with a poor credit rating.

5 Steps for Getting a Personal Loan with a Poor Credit Rating

Step 1 – Find a Lender for a Personal Loan

To find a lender for a personal loan with a poor credit rating start with your regular bank. If you are unable to secure a loan from your bank, then go online and find non-traditional lenders.

Step 2 – Identify Why You Need a Personal Loan

Identify why you are looking for a personal loan. Are you making a major purchase such as an automobile? Perhaps you are seeking a mortgage, or maybe you are looking for short term financing for weddings, home improvements, or to consolidate existing debt to try to reduce your monthly payments and improve a person’s credit rating.

Step 3 – Start to Shop for a Personal Loan

Now it is time to begin shopping. Find at least 6 lenders and then compare interest rates and repayment terms. Watch for high closing costs, hidden fees, and other loop holes that can turn what appears to be a good loan offer into a poor choice.

Step 4 – Do the Paperwork for the Personal Loan

If you are applying through a local financial institute, make your appointment and then meet with the lender to complete the application. If you are going to borrow from an online lender you will fill the application online and then provide any additional documentation required via email or fax.

Step 5 – Review the Loan Documents

Once the loan is approved you should review all of the loan documents to ensure the terms were what was agreed upon. If everything is in order sign off, collect your check, and put it use as planned.

For someone with poor credit, the available of a personal loan will vary significantly. If a person has recently filed bankruptcy or has not yet been discharged from bankruptcy there are fewer lending options. A person can expect to pay high interest rates with more restrictive terms.

A personal loan with a poor credit rating is available from many non-traditional lenders. Follow these steps to make your hunt for a personal loan stress free.

 


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