Bad credit situation is certainly pathetic and it becomes vicious when you fail to find a timely solution. However, now when online lending is taking is due space of importance in the financial lives, situations are promising. Some specialised solutions are there to tackle some stressful financial issues and poor credit situation is one of them. To help people come out of this difficult condition, online lending companies offer guaranteed loans. These are the short-term loans that help the borrower in many ways. If you too are in a struggle with credit score performance issues, knowing the following things can bring a good change in your current circumstances.
Double benefit feature of bad credit loans
These loans help you in two ways and both the ways are good to remove the complications from your financial future. The best thing is, whatever is your purpose to take the funds, these two benefits naturally pair with the loan deal. Want to know about them? Here are they –
- Financial assistance during financial crisis
No mainstream lender wants to approve funds to a bad credit scorer. No matter how urgent are your needs, they are never sure to even consider your application. But as the bad credit loans are specialised financial products, they are available irrespective of credit score status. Your urgent need of money for instance – car service, an unexpected flight out of city to meet an ill relative, some pending bills at the month end etc. can be satisfied. You can find logic in money matters but not in the reasons of need of money. They are more emotional and cannot be defined through any credit score status.
- Credit score improvement
By borrowing funds, you can also improve your credit rating. Amazed? But it is actually possible. The lenders intentionally keep the loan deal customised to help the borrower repay the loan easily. When the borrower pays instalments on time, a boost in credit rating occurs. By the end of the loan tenure, a good improvement in credit score situation is sure to come. In fact, many fund seekers borrow funds precisely for this reason. You too can have great benefits, if this is your reason to apply for the loans.
No obligation policy is another big advantage
With low credit rating, it is not possible to arrange a guarantor. Obviously, people hesitate to back your loan application. No one can take risk in the name of a person who is already in risk on financial matters. The general perception about the poor credit scorers is that they are more prone to missed repayments. In that case, the obligation is sure to transfer on the guarantor. However, the liability is not as equal as the co-applicant but still no one wants to get chased by the lenders for someone else’s faults. The online lenders know this fact and provide loans for bad credit with no guarantor. But they need something to compensate their own risk and for that they ask to prove repay capacity. Salary slips, income status, if possible an additional income can also be presented. Having a strong performance on repayment side let the lender take the applicant as a safe bet to lend money.
By the way, before the doubt arises in your mind, it is best to tell you that even collateral is also not required. First reason for this is, the loans are of short-term and second reason is the repayment capacity factor nullifies the need of security.
No upfront fee, no prepayment penalty
Online loans facilitate transparent funding and you can prevent the unfair things. For instance, the upfront fee that many lenders take is not a genuine thing. Even FCA denies its legal presence in the loan market. However, still some fake names manage to intrude in the direct/online lending market. You need to be cautious, they have some symptoms through which you can detect them. For instance – Over popularised advertisements and rate quote, exaggerated commitments.
Besides this, it is better to find a lender with no prepayment penalty. This is not an illegal thing like upfront fee but it is better to find a loan deal without this prepayment charge. In case, you want to repay the loan before tenure completion, this feature can help prevent the expenses of early payment of loan.
The above information can help you take a calculative decision on bad credit loans. Borrow funds stress-free, repay on time and say good-bye to poor credit situation. Do not let it come again!