How to Get a Loan with Bad Credit

08 Sep How to Get a Loan with Bad Credit

Has your bank said no because of your bad credit history? Or have late payments on your loan accounts? Here’s a simple guide on your loan options, even with low credit rating.

bad credit; finance check

When is the good time to look at your finances?

One of the factors which lenders take into consideration in approving a loan is the credit rating. Hence, people with adverse credit, a.k.a. bad credit, think that they can no longer get a loan because of this. Fortunately, there are banks and lenders which have available loan options for people who have negative points on their credit file. Here’s a good news—it doesn’t involve risking your car or your current home equity.

What does ‘impaired credit’ mean?

‘Impaired credit,’ ‘adverse credit,’ or popularly referred to as ‘bad credit,’ is when you’ve had history of failing to pay your credit agreements which gives you the inability to secure approval of a new loan.

Circumstances such as an illness, a failed business, or a bankruptcy, are often considered high risk even when you have fixed the cause or settled the outstanding debt. To check your credit score, you can consult your trusted finance broker, email freescore@dnb.com.au, or visit https://www.veda.com.au/yourcreditandidentity/

What Causes Bad Credit?

Here are some of the reasons why you have a negative mark on your credit file:

  • Has previously declared bankruptcy
  • Temporary sickness without pay
  • ‘Too many’ credit checks
  • Exceeding credit card limit
  • Missed payments, past due dates

Not being able to secure a loan may vary from client to client. For a comprehensive finance consultation, you may contact us.

What are the loan options available?

Having a bad credit history may impose a risk in the approval of your loan. Most major banks use automatic credit scoring process so once your file is detected to have a negative mark, it will automatically get rejected.

There are lenders who believe that everyone deserves a second chance which is why they offer customised bad credit loans targeting clients with poor credit history. Pepper Money, one of the competent lenders in the industry, has a wide range of loan options which take a different approach. Instead of focusing on the client’s credit history, Pepper Money asks questions in regards to the financial circumstances of the clients and their ability to settle the loan.

Keep in mind, though, that these kinds of loans suggest shorter terms and higher repayments. Securing a loan whilst having a bad credit history is possible and easy.  You just have to find the right lender to match your financial capability. Talk to your finance broker about it.

Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.

Corporate Credit Representative (486927) is authorised under Australian Credit Licence 389328.

 

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