The basics of availing a loan with bad credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » The basics of availing a loan with bad credit history

The basics of availing a loan with bad credit history


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.

When you have a bad credit history availing a loan becomes the most difficult task. This is an adverse situation for anyone to be in and this can affect your loan approval as well. Individuals with a bad credit history are generally considered to be the 'most risky' borrowers. Lenders find it difficult to trust borrowers who have a bad credit history and the credit checks that are done prior to the sanctioning of the loan generally goes against them. The first thing that a lender will look at is the credit history or a person`s creditworthiness while applying for a loan.

But there are certain loan plans for those with bad credit history and these plans don`t require any credit checks and borrowers can get the funds they want. There are banks which give secured loans where those with bad credit are required to pledge a piece of property or other assets as security or collateral. There are secured and unsecured loans available with varying interest rates.

Personal loans can be availed for various needs such as a home renovation, medical expenses, outstanding on credit cards etc. But these loans will come with high interest rates and will most often require a co-signer. These loans generally have a short payback time. Lenders charge a heavy rate of interest on such loans as they are willing to take the risk assuming that the individual will pay back the loan.

But there is an advantage when you avail loans despite the bad credit history. Ensure that you pay back your loan within the allotted period of time. This goes a long way in helping to repair your damaged credit. Also ensure that you don`t default on payments and make your payment on time. Give the lenders ample proof that you got into bad credit due to some unavoidable circumstances. If you make an honest attempt to set things right then the lenders will look at your credibility and securing loans in the future will become much easier.

Try explaining to the lenders and give valid reasons as to why you got into bad credit in the first place. It could have happened due to sudden loss of job or due to some illness or prolonged hospitalization. Now that you are out of that situation, show them that you are on your path to recovery and make an honest attempt to rebuild your credit which may take quite some time but would be well worth it.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!