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Apply for a Personal Loan with Lendela
If you’re having a hard time getting a loan due to a bad credit score, don’t worry as there are still options available. Find out how you can improve your credit score.
Bad credit personal loans are meant for borrowers who have less than desirable credit scores. Lenders usually deem these borrowers more likely to be delinquent on their loans by making late payments or defaulting, and hence avoid lending to people below a certain threshold.
Fortunately, other lenders consider more than just a credit score when it comes to borrowing. These may look at other aspects of your personal finances such as your income, current debt and ability to repay before making a final decision on your application.
While you’d probably pay more than a borrower with good credit, but you’ll still have options when you find yourself in need of a loan.
These types of financing institutions are usually more lenient when considering applicants with lower credit score:
If you need a loan urgently and unable to improve on your credit score in time, you may consider one of these loan options:
The costs can vary depending on factors including the lender, the type of loan and the amount borrowed.
However, to protect borrowers from exorbitant hidden fees, the Ministry of Law’s Guide to Borrowing from Licensed Moneylenders has indicated a maximum cap on fees and the interest charged on both secured and unsecured loans:
Moneylenders are also allowed to impose any legal costs ordered by the court for a successful claim on the borrower for the recovery of the loan. To further prevent moneylenders from overcharging borrowers, the total charges imposed by a moneylender on any loan cannot exceed an amount equivalent to the principal of the loan.
As with any loan, approval is determined based on a range of eligibility factors and lending criteria. So, before applying, it is important to check the details and requirements of a loan to decide if it is suitable. Some other actions to consider include:
Credit Bureau Singapore publishes its credit grading table on its website:
Source: Credit Bureau Singapore
The highest possible credit score risk grade is AA. Grades of B or C are signs of delinquency or late repayments, and grades of D or lower are usually the result of defaults. Lenders in Singapore usually require a least a BB to approve your loan application.
Typically, people with bad credit have struggled paying off debt in the past or simply don’t have a long-enough credit history to get a good credit score. If you’ve missed payments, defaulted on previous loans or declared bankruptcy, it’s likely that you won’t have a good credit score.
While it depends on the type of loan you’re looking to borrow, you’ll follow about the same process with each lender and need to supply much of the same information:
You’ll also need to give your lender a bit of basic information about yourself, including
While improving your credit score can be a slow process, it will help you find better financing and more favourable rates down the road. You can start working on your score by taking advantage of some of these tips:
Bad credit isn’t the end of the line when it comes to taking out a personal loan. There are multiple lenders and loan options available to you no matter your score, but be careful. You may face high interest and multiple fees when you borrow, making your loan difficult to afford.
As with every big financial decision, compare your loan options before signing a loan contract.
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