If you find yourself in a situation where you urgently need money, and your credit history, according to BCI information, turned out to be (for some reason) negative, then when applying for a new loan, you will inevitably encounter certain difficulties. But even these difficulties are in most cases surmountable: it is important to know what legal options a “fraudulent” borrower has to obtain a new loan.
So, in this articles we will suggest you 4 methods that can help you get a loan with bad credit in 2022.
1. Contact a professional loan broker.
You need to collect all documents, including past loan arrears, and simply fill out an application. As a general rule, an intermediary (if he really is a professional with a long work experience) knows all the ins and outs of taking a loan with a negative credit report, based on information from the CBI (Credit Bureau), as well as about financial institutions.
- Pros: No need to call and compare offers from different banks that make a loan to a borrower who has defaulted on previous loans. A loan broker, after analyzing your situation, will select the best solutions for you both in terms of loan amount and interest rates. They can be both credit products from banking entities, and (optionally) offers from private financing offices. This option is especially suitable for those people who have a “very bad” credit history, that is, they have more than one or two cases of non-payment of the loan.
- Cons: payment for intermediary services (as a rule, this is a percentage of the loan amount), and often a loan broker works with an advance payment. There is a possibility that even after giving an advance for services to a broker, the bank will reject it.
2. Get a Secured Loan or collateral
If you don’t want to overpay for a broker’s services, you can apply for a new secured loan in the form of real estate, property, or personal collateral. This method is considered the most reliable from the point of view of any banking institution, so borrowers with any credit history, both positive and negative, can use it.
- Pros: Having the opportunity to offer something as collateral (by the way, in some cases it can even be life insurance), you can count on issuing a sufficiently large amount of credit funds, but less than the cost of the collateral itself, as well as on the minimum interest rates (with the existing ones in your charge).
- Cons: The bank will refuse to grant you a guaranteed loan if the collateral object you offer is already included in another loan guarantee contract that has not yet been repaid.
3. Take a micro loan or express loan in cash without collateral
If there is demand, there will be supply, especially in today’s difficult living conditions. Today, many banking institutions, both large and small and young, offer loan products to borrowers who have negative records in their credit files. As a rule, in this case, the amount of issued credit funds will be small.
- Pros: By taking out microloans and quick loans over time and paying them back on time, you can significantly improve your credit “reputation,” thereby laying the groundwork for larger loans in the future, including home and auto loans.
- Cons: With outstanding loans behind you, be prepared for the fact that banks will limit the repayment period of your loan, as well as significantly increase interest rates. By doing this, they try to compensate for possible damages by not returning the funds.
4. Get a credit card
Nowadays, many banks, especially regional ones or those that have just appeared and want to gain a foothold quickly in the banking services market, issue credit cards, “turning a blind eye” to failures in the credit of a potential borrower. history. You can also apply for a credit card at a bank that serves you in a salary project or in a deposit that you opened earlier. In these cases, you can expect to receive a card with a credit limit.
- Pros: High age threshold to issue a credit card. A high guarantee of prompt receipt of the necessary amount for urgent needs, however, in non-monetary form. Providing you with a certificate (statement) of regular payments on various accounts (including utility bills) and that you have regular income are additional benefits.
- Cons: When buying a credit card, be prepared for the fact that banks have a negative attitude towards unscrupulous borrowers (even if you became one through no fault of your own) and offer quite difficult loan conditions, including high rates reimbursement and fees for the service of a credit card.
You can also try to get a loan:
- In a shopping center or store, where you will be offered a small amount without a deposit, without asking the CBI for information and filling out an application with a minimum of your own documents;
- Go to credit unions for help, but even in this case you should seriously evaluate your ability to pay the debt on time; • Use the services of a private lender, but here it is important to find a notary who can draw up a legally competent agreement on the transaction;
- Having received the necessary funds through online loan exchanges, this opportunity is suitable for advanced Internet users.