If you have bad credit but you badly needed a loan, you will have a hard time finding one that meets your needs. You will need a high credit score for an unsecured personal loan.
However, there are lending companies who specialise in providing loans for borrowers even with bad credit. You might want to consider these alternatives, such as cosigned loans and personal loans before you open unsecured loans for borrowers with bad credit.
Thus, in this article, we will learn of the tips on how you can get personal loans in Singapore even if you have bad credit.
Determine the Pros and Cons of Having a Personal Loan with Bad Credit
Borrowers with bad credit will more likely experience having high-interest rates and fees. This depends on the type of loan that they qualify. However, there are times that the loan is your only best financial option. For example, if the personal loan is the only option that you have to repair your car so you can report to work, then the loan might be worthwhile to take.
Indeed, you have to be very careful when you are borrowing the money. If you select a loan that is unaffordable, then you can only fall into the endless cycle of debt. For payday loans, this can be very risky. This refers to repayment periods of only a few weeks with very high fees. Meanwhile, for borrowers with a bad credit loan, having a secure loan can be one way to have access to affordable loan terms.
When you go for personal loans even if you have bad credit, you have many options to choose from. There is no shortage of bad credit lenders in the market. You just have to take time in finding the best option for you. Also, you can repay your debts over months or years. Finally, this can provide you a chance to improve your credit score.
However, if you wish to apply for personal loans Singapore but you have bad credit, you can experience high borrowing costs. You can also be trapped in debt. Bad credit companies may charge you with high fees. As such, you must take care when you research for lenders. Finally, some companies may require collateral.
Improve your Credit Score
If you are planning to have a loan that is not an emergency, one tip that you can try is to improve your credit score first. With this, you can now comfortably afford the loan that you will need. You can begin by making on-time payments. This is true for credit cards. You can reduce the balance on the credit cards to below 30% of the allowed credit limit. Next, make sure that you don’t apply for new credit cards.
The combination of no new credit card, low credit utilization, and on-time payments will determine 75% of your credit score. It is possible that making an effort on these three factors will raise your score by 100 points around 3 to 6 months only.
Meanwhile, if you have an emergency and your application for a personal loan has been dismissed, you should ask other financial institutions. Ask the help of credit unions or banks. Talk with the loan officer and schedule an appointment. Convince them that you are creditworthy and they should grant you the personal loan.
Indeed, having a bad credit score will not qualify you for the best terms and rates but don’t fret. Do not assume that only the worst terms and rates are available. You can sometimes find a better deal at the credit unions or banks.
If you have established a good relationship with credit unions or banks, you can use it to your advantage. If the bank knows you well, your low credit score can be mitigated by paying on time. Moreover, you can also find many online lenders that offer loans to consumers even with poor credit scores.
Beware of Scams
Many online lenders will promise loans with no credit checks to borrowers with bad credit. For some, this option might sound ideal. However, you must be very careful. Their websites can be advance-fee loan scams. According to experts, if the lender is not interested in your credit history, then it is a big red flag. Sometimes, this can indicate that the website is fraudulent.
When you visit these types of sites, make sure that you contact the authorities to check if the lender is authorised to do business within the area. You can also research and ask other customers who have filed complaints against the specific lenders.
One of the biggest disadvantages of having bad credit is you will become more susceptible to scams. As such, you must be very careful not to provide any sensitive information. Don’t do this without obtaining the legal documents of the loan. Get more tips at EasyFind instant loan in Singapore.