3 Ways To Borrow Money Despite Having Bad Credit
Most lenders look for perfect credit score and sufficient income before approving loans to borrowers. If your lender is in this category, then it can be hard for you to get approved. Others will approve you, but the loans will have higher interest rates thus you’ll end up paying more.
All the same, you can still improve your chances of borrowing with bad credit. This post is an ultimate guide on how to borrow with bad credit. Read below to find how!
1. Refine your credit
Credit score is a major consideration when applying for a loan. Poor credit will either not get you approved and if approved the interest rates will be much higher. To refine your credit score, start by avoiding unnecessary borrowing and expenses with your credit card.
Practice discipline with debts. Make sure you pay your loan on time as this improves your score. Review your credit reports at least once per year and learn what lenders are looking for.
2. Pledge collateral
If you have assets you can borrow money against them. Nevertheless, before you decide to pledge any of your assets, make sure you examine the amount of risk you are putting on them if you are unable to make the payments towards the loan.
If you pledge a home, will you have a place to live if it’s foreclosed? Make sure none of your family members will suffer if you lose the asset because you defaulted the loan.
3. Borrow from friends and family
There are times professional lenders will not be willing to lend you because of various reasons such as bad credit or irregular income. In such situations, you can decide to borrow from friends and family, yet this is not always good.
They may seem to have a lot of money, but they may have other financial goals. So you better do your things on your own. Not often will your friends or family members be ready to take the risk on lending their money.
Tomorrow is never certain. Despite having planned to pay it off, life can punch you right, left and center and this can affect the relationship between you and your lender. The best thing to do if a family member or friend is willing to lend you is to have the person as a cosigner for your loan.
A consignor serves as a guarantor and will apply for the loan with you. In case you default or something happens to you, and you cannot settle it, then your cosigner will be responsible for repaying the debt.
And because most professional lenders are strict on credit and income level, make sure the person you choose to be your cosigner has good credit and reliable income.
Need cash fast? Always borrow from the bank or a licensed moneylender. We are the best moneylender in Singapore. If you need a loan, wait no longer! Contact us today or submit an application form to us!