Things To Know When Getting a Bad Credit Loan
If you’ve ever wondered if you can apply and get approved for a loan on bad credit, wonder no more. You can do so with a personal loan specifically designed for individuals with bad credit ratings.
It is, however, important that you know how your bad credit history affects the way you live your life and your chances of getting financial assistance in times of dire need. It will serve you well to have essential knowledge of how you ended up with a poor credit rating and what you can do to repair it.
Once you’ve equipped yourself with important information on credit history repair, you will be empowered to manage your finances more responsibly and avail yourself of financial assistance that you can pay off with confidence.
Perfect Payday shares the following information about bad credit and the personal loan you can apply for despite your poor credit rating.
Credit history and its effect on your life
Your credit history is a summary of all your financial transactions. It lists down all the loan and credit card applications as well as the corresponding payments you’ve made for credit transactions you have been approved for.
Banks and lending institutions refer to your credit history as basis for your eligibility to be approved for a loan or credit card.
Having a good credit record is not only essential for when you need to get approval for a loan or credit card. It has a huge impact as well on other transactions you enter into.
If you want to rent an apartment, for example, the lessor will look into your credit history to check if you are financially capable to pay the rental fee. The same goes when you want to buy a new car or get a monthly data plan for your mobile phone.
In short, it could be more difficult to get approved for any transaction you enter into when you have a bad credit history.
Loans for individuals with bad credit
Whilst it is true that it could be harder to apply and get approved for a regular loan due to a bad credit history, it is still possible through small loans or small amount credit contracts (SACCs).
Compared to a regular loan, a small loan caters to people with instant cash needs, which can be paid off for a period of 16 days to one year. The maximum amount that can be provided to small loan borrowers is $2,000 and requires no asset or security to be approved.
Unlike regular loans, small loans don’t have regulated fees. However, there is a cap on the interest fees for such loans as structured by the government. This prevents loan sharks from charging additional or hidden fees on small loan applicants.
Prior to small loans, payday loans were offered to customers with instant cash needs. The problem with this is that payday loans should be repaid strictly on the next payday, which proved to be harder for customers to meet, due to the short repayment period and higher interest rates.
To counter this, the government introduced small loans with capped interest fees and more flexible payment periods. This type of loan has become beneficial for the quick cash needs of customers who use it for a variety of financial emergencies.
However, the most benefit that small loans provide is helping out people with bad credit repair and improve their credit ratings. Through small loans, people with bad credit history not only can use the loan for their financial needs but also slowly but surely mend their credit reputation.
How small loans help repair and improve credit ratings
Reputable lending institutions like Perfect Payday believe that providing financial assistance to those in need should be inclusive. This means everyone is welcome to get the financial help they need when they need it the most.
This is why small loans are also provided for people with bad credit to help with their financial needs, provided that they meet the eligibility requirements and have shown proof of capability to pay off the loan.
Small loans, however, go beyond catering to instant cash needs. They can also be used to repair and improve your credit history.
Perfect Payday, for example, offers small loans from direct lender to give people with bad credit a chance to remove the stigma on their name due to payment defaults made in the past. Whilst credit history remains a part of its assessment, Perfect Payday doesn’t solely base its approval on past credit records but also the individual’s current financial condition—that is, the means or resources to pay off the loan as well as the effort to pay such in a timely manner.
Apart from availing of small loans, individuals with bad credit may also opt for other ways to improve their credit history. They may choose to consolidate all their small loans into one and pay them off by applying for a larger loan. If they have credit card loans, they may opt to transfer the balance in one credit card with a larger credit limit for easy repayment.
How Perfect Payday helps improve your credit history
When you apply for an unsecured personal loan as a means to repair and improve your credit rating, Perfect Payday will evaluate your financial eligibility. You can rest assured that you will be assessed fairly, basing your eligibility on your overall financial capability.
As part of its assessment process, Perfect Payday will also discuss with you other loan options to help with your monetary needs, based on your current financial situation. You will benefit from this consultation, as you gain valuable insights into how you can responsibly manage your finances.
Availing of a Perfect Payday small loan on bad credit
Applying for a small loan with Perfect Payday is hassle-free. You can apply and file your application through the Perfect Payday website and wait to be approved for an hour. The assessment process will only take longer if more requirements are needed to approve your application.
Once you get approved, the loan you applied for will be deposited to your account within an hour or the next business day if application was made outside of business hours.
The best part is that you can apply for a high acceptance rate loan in the future once you have established a good relationship with Perfect Payday. You can use this to finance a small business you want to put up or buy that dream car or house.
Benefits of small loans for people with bad credit
Apart from helping finance your immediate cash needs, the best benefit that a same day loan from Perfect Payday can give you is the opportunity to re-establish your credit reputation.
Should you apply for a loan with other lending institutions, they may refer to your Perfect Payday loan transaction and see the improvement you’ve made in making sure that your repayment obligations are met on time. You will be seen as a good risk to take when deciding to approve you for a loan.
If you worry that availing of a small loan from Perfect Payday or any other lending institution will only bury you in more debt, worry not. Know that the government and the whole lending industry in general have made considerable efforts to ensure that availing of small loans is safe and completely regulated through the capped interest rates and the non-asset or security requirement.
What to remember before applying for a small loan
Should you decide to avail yourself of a small loan, think long and hard before filing that application. Examine your financial capability and ask yourself if you really need to get a loan.
Take advantage of the financial advice provided by Perfect Payday when you apply for loan application or seek the help of a certified financial counsellor to help you arrive at a sound decision.
You can also do an in-depth research before applying for any loan to see if it’s something that suits your needs. All resources are available online for any information you might need, particularly if you need more details on the background of the lending company you’re planning to apply a loan with.
When you are armed with the right information, you will be able to make an informed decision when thinking of applying for a small loan. Remember that what you aim for is to have a financial remedy for your immediate needs and a solution to help repair and improve your credit history.
Get in touch with Perfect Payday for any questions you may still have on small loans or if you need more information about bad credit and what you can do to manage your finances more responsibly.