Did you know the average American has an average of $38,000 in personal debt? If you need to settle credit card debt, pay your bills, or for other reasons, you might be on the market for a loan. However, what happens when your credit is bad?
Read on to learn how to apply and get approved for guaranteed loans for bad credit.
Learn About Your Credit
Before you attempt to get a guaranteed loan for bad credit, you should learn your credit score. What you might consider bad credit has to align with the national averages.
This is how lenders measure credit scores:
- Good or excellent: 700 to 850
- Fair or average: 620 to 679
- Bad: under 580
To learn what your credit score is, you can request a copy of your score from the major credit bureaus. Although most loans will require a credit check, there are a few loans you can qualify for without a check. Click for more information on loans that don’t require a credit check.
Unlike traditional lenders, credit unions tend to approve loans for those individuals with bad credit. Credit unions are oftentimes community-based, and their purpose is to help those with bad credit.
Unlike some traditional banks that can charge up to 36% in interest, credit unions cannot charge more than 18% in interest.
Show Them You Can Pay It Back
Even if you have bad credit, this doesn’t mean you cannot afford to pay back a loan. Before some lenders can extend a line of credit, they want to know you will be able to pay them back.
To show you’re a worthy borrower, ensure you have proof of income ready to show the lender. Start to gather your most recent paystubs, a letter from your employer, and a list of assets.
You might also be able to get a loan if you prove you can get a co-signer. The co-signer you pick must have a good credit score since they will guarantee you pay off the loan.
Improve Your Credit Score
If you want to have more loan choices, you can always improve your credit score. You can improve your credit score by paying down your debts, making your payments on time, and correcting any errors.
Research All Types of Loans Available
To get the best rate possible, you should research all of the loans you might qualify for.
For example, if you look into getting a personal loan, you might find that there are secured and unsecured personal loans.
If you need cash fast, you could also obtain a payday loan, which is always available to those with bad credit. However, keep in mind, payday loans can have interest rates as high as 391%.
For a more reasonable loan, you can research online loans, peer-to-peer lending, and home equity loans.
How to Get Approved for Guaranteed Loans for Bad Credit
Now that you know how to get approved for guaranteed loans for bad credit, it’s time you get the money you need. Start by researching all types of loans available, learn your credit score, try a credit union, and show you can pay back the loan.
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