Personal loans for people with low credit score – Perfect Financing source
When applying for personal loans for people with bad credit, you will have to deal with higher rates and more strict terms compared to loans with credit check. However, you can have the lender allow you a better deal by pledging collateral.
Comparing personal loans for people with bad credit and those that involve credit check
Pledging collateral: there are some situations where lenders look at the credit history of the person applying for their funding to decide on the interest rates and terms to allow. If you have a low credit score, lenders will find it a bit risky lending you their cash since a low score results from things like defaulting and bankruptcies among others. You may therefore be required to offer some security in a situation where having a better credit score would have seen you get the funds collateral-free.
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Terms and interest rates: as earlier mentioned, some lenders will depend on your credit score to arrive at the terms together with interest rates to allow on the amount of cash that you are applying for. Personal loans for people with bad credit carry higher interest rates to make it easy for the lenders involved to offset any risks likely to occur in case of defaults. The terms on bad credit personal loans are also strict to ensure that the borrower makes prompt repayments.
Repayment periods: by virtue of having a high credit score, the lender you pick will easily allow you a longer repayment period and negotiating for some better installments will be pretty easy. However, you will have to deal with shorter repayment periods when applying for personal loans for people with bad credit.
Applying for personal loans
You can get personal loans online or from local lenders but you will still have to choose between those that involve credit check and those available even to people with bad credit. When dealing with local lenders, you can call them where you can get their numbers from local directories. Dealing with online lenders comes with a number of benefits because:
• You will only need internet access to apply
• There will be no paperwork in the application process
• The cash will be sent straight to your account