Don’t let your credit rating hold you back. Find a bad credit personal loan that’s right for you.
Bad credit is tough to shake. Having negative listings on your credit file can seriously hinder your ability to access loans, but if you’re on the “credit fringe” there are still a variety of loan options you can consider. Find out what’s available to you in this guide.
How can I be approved for a loan with bad credit?
There is no trick to being approved. However, there are a few things you can do to make sure you get the best chance.
- Don’t make too many credit applications at once.
This is a red flag to lenders and can hinder your chances at future credit approvals. If you have done this, try and wait to make any future applications.
- Check your credit score to see where you stand.
By checking your credit score you can get an idea of your credit position and where you fall in the credit-active population.
- Use a personal loan calculator.
This will ensure you don’t apply for a loan you can’t afford. Lenders, when reviewing your application, will only approve your loan if you can afford the repayments.
What are your personal loan options with bad credit?
There are various personal loan options for people with a bad credit rating.
- Secured personal loans.
If you can provide collateral, such as a car, equity in your home or another high-value asset, a lender may be more willing to overlook a few negative marks on your credit file.
- Guarantor personal loans.
Do you have a partner, close friend or relative who is willing to guarantee the loan for you? You may be able to qualify for a guarantor personal loan. There are certain bad credit lenders who offer tailored products for borrowers who you may want to consider.
- Short term loans.
Are you only looking to borrow up to RM5,000? Then you can consider a short-term loan from a payday lender. These lenders are less focused on your credit history and more focused on your current financial position and ability to repay the loan.
- Large amount bad credit loans.
If you need to borrow more than RM5,000 and have bad credit, you may find a few lenders that offer loans as much as RM10,000 to those with adverse credit history.
How do I know if I have bad credit?
Although the definition of “bad credit” differs between each lender, bankruptcy and defaults are generally all red flags to lenders and tend to put you in the bad credit category.
However, your credit file also holds other important financial information which may look bad to prospective lenders. This includes late bill payments, late loan repayments, multiple credit applications or exceeding credit card limits. Excessive credit applications in a short space of time can also put you in the bad credit category, if only for a short space of time. There are varying levels of how bad your credit file can look to lenders, so be sure to check and compare the application criteria for personal loans to see if you may be eligible.
Talking to lenders is also a good idea – you may be surprised at how flexible they can be.
Bad credit doesn’t have to stop you from getting a loan – compare your options and find out what’s still available to you.