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About a third of Americans have a credit score lower than 601. The rule of thumb is that a score below this number means that you have bad credit. Is your credit score less than perfect?
Maybe you learned about your bad credit after you were denied a loan. Either way, your credit score shouldn’t stop you from borrowing a loan to get your financial affairs in order. Don’t know how to get a loan with bad credit?
We’ve got you covered. We’ll tell you everything you must know to get a loan with bad credit. Read on to learn more today.
How to Get a Loan with Bad Credit: Is It as Easy as Some Say?
Many people think that bad credit scores can stop them from borrowing money to meet their financial needs. While your credit may limit your loan amount, you can get a loan with bad credit. Finding the right funding may be challenging.
Not all lenders are open to working with consumers that have poor credit. Yet, that shouldn’t stop you from putting your finances in order and gaining financial freedom.
Here are some steps you should follow to get your bad credit loan approved today.
1. Take a Look at Your Finances and Cover Your Bases
Before applying or looking into bad credit loans, it’s essential to take a hard look at your finances. Why do you need to borrow money? Will the loan help you take charge of your finances?
How much money do you need to gain financial freedom? It may be difficult at first, but you must take a hard look at your finances. You must be realistic about your current financial health.
What is your credit score? If you haven’t checked your credit in a while, it’s recommended that you get your credit report as soon as possible. This information can tell you more about your options.
You may owe different types of debt such as mortgage loan, credit card debt, personal loans, among other debt. You should keep in mind that taking another loan won’t make them go away.
Unless you use the loan to consolidate some of your debt. It’s recommended that you consolidate using a bad credit loan if your payment and finance charges will go down. After learning more about your financial needs, you must research your options.
If your credit score is poor, you should consider bad credit lenders. Most of these lenders won’t run a credit check. Others may run a soft credit check that doesn’t lower your credit score. But the lender won’t put a lot of weight on your credit history.
These lenders take a look at the whole picture. They will ask questions about your finances and purpose of your loan. Bad credit lenders understand that you want to get your finances back on track.
2. Contact Your Potential Lenders
After you research and find several bad credit lenders, you should contact them to learn more about their process to get a loan with poor credit. Each lender has their own loan application and approval process. It’s recommended that you ask them about their requirements for approval.
The most typical bad credit loan requirements are:
- You must be 18 years or older.
- Must own a valid US checking account.
- You must earn a steady stream of income.
- Must be a U.S. Citizen or permanent resident.
These requirements may vary on a lender basis. If you are unsure about meeting no credit check loans qualifications, you should check Bonsai Finance to learn more.
Don’t forget to ask about their terms and conditions. It’s important to ask about their payment terms, interest rates, and other possible financing charges.
3. Gather All Your Documents
Since the application and processing of bad credit loans are so fast, it’s recommended that you gather all your documents before applying.
Your lender will ask for proof of income, account information, legal ID, among other documents. You must submit these documents in order to get your loan approved. You may think your income doesn’t qualify you for this loan.
Yet, your lender may accept retirement, social security earnings, among other types of steady income. You may submit a W-2, tax return or even bank statements as evidence of your income.
Some of the identity documents you may submit are Passport, State ID, utility bills, among other acceptable documents. You should consult your lender to learn more about what documents meet their standards.
4. Apply for Your Loan
Once you organize all your documents and choose your lender, it’s time to apply. Most lenders such as Payday Available offer online applications to get a loan with poor credit..
They will ask for personal information such as name, social security number, income, among other details. Don’t hesitate in contacting your lender if you have any questions about their application process.
During their application, the lender will request all the required documentation. Keep in mind that they may request additional documents in order to approve your loan. It will depend on factors such as your finances, loan amount, income, among others.
5. Get Your Loan Approved and Receive the Funds
Most lenders offer approval of these loans in as little as a few hours. It’s recommended that you ask your lender about their approval timetable before applying. Most of all, if you are getting this loan to make last-minute payments or cover a financial emergency.
Once you receive word of your approval, you should expect your lender to transfer your funds in 24 to 48 hours. This timeframe may vary from lender to lender. Your financial institution can provide insight into what to expect after approval.
Can You Get a Loan with Poor Credit?
Yes, you can get a loan with poor credit. Before applying for any loan, you must do your research. It’s important to apply for your loan with the right lender.
You should consider their terms and conditions including approval requirements, loan amount, among other details. We’re confident that if you follow our how to get a loan with bad credit guide, you will get your bad credit loan in no time.
Are you having financial difficulties? A loan is one of the many debt relief options available.
Want to learn about more debt management methods? Read our article to learn about other alternative debt management options.