Personal Finance

Personal loans for people with bad credit

If you have bad credit and are finding it difficult to qualify for a personal loan, don’t worry as there are options available. Do realise though, impaired credit will come with unfavourable terms if you qualify. Often times, if you have bad credit, depending on the severity of it, you won’t qualify as lenders will view you as a high risk.

To be able to qualify for main stream personal loans you will have to fix your credit rating which will take some time, but is worth the effort.

There are many instances when people with bad credit will try and apply for personal loans that are advertised with great rates. They then become extremely frustrated when getting knocked back, this type of rejection can become very draining.

Below are a few different personal loan options for individuals with bad credit.

Make sure you explore the different choices carefully to determine which if any are right for you. When it comes to loans and contracts, be sure your completely understand what you are signing up for and the pros and cons that are attached.

Payday loans – If you are in need of instant cash and don’t have time to wait for a loan application approval, this may be an option for you. They are typically more lenient with your credit rating although charge a premium for their service. Make sure you are very clear on the terms and have the ability to make the repayments on time. The fees for late or missed payments can be extremely high.

Pawnshops – Don’t laugh, these types of operations were the main lenders of cash in the old days. If you need cash quickly, they are definitely able to accommodate. Again make sure you understand the terms and are able to make the repayment(s). Alternatively you may just want to sell unwanted items to them for cash.

Non-profit initiatives – There are multiple agencies across Australia that provide low or no interest loans for emergencies. Programs include StepUp, Progress loans, Microfinance loans.

Non-bank lenders – You may be able to qualify for small loans from a building society or small finance company. As mentioned above, the terms may not be favourable but may be better than the alternative payday loans companies.

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