Applying for a consumer loan in conditions of constant crises and lack of funds is commonplace, and many citizens use the offer of banks in the form of a loan at a certain interest. But often, having taken out a loan, the borrower cannot repay it due to unforeseen reasons or deliberately does not want to do this, which is immediately recorded in the credit history. As a result, getting a loan with a bad credit history becomes quite problematic, but still possible.
Negative factors affecting the quality of credit history
By issuing a loan and regularly paying the appointed payments, the borrower creates a positive image for himself, which greatly simplifies the receipt of subsequent borrowed amounts in other banks. The situation becomes exactly the opposite when, due to certain reasons, the borrower stops making payments and arrears arise. In such cases, a record of contractual breaches is recorded in the loan recipient's history, and it is no longer so easy for the borrower to obtain a loan with a bad credit history.
The reasons why "dark spots" in the credit history can appear are:
- repeated violation of the established payment terms without giving reasons;
- an unsatisfactory impression of a bank employee about a potential borrower, namely: incrimination of lies, doubt about the authenticity of the documents provided, condition and appearance, confusion in personal data and information about oneself;
- erroneous actions of the bank (payment made late);
- the actions of fraudsters who fraudulently issued a loan on the borrower's passport.
The borrower is not to blame for the last two reasons, so it is easy to eliminate them when contacting the bank and credit bureau. As for the rest, it is quite difficult to restore the reputation and subsequently get loans from banks without any problems.
5 main ways to get a loan with bad credit history
There are 5 main ways through which you can get a loan with a bad credit history.
1. Lending not in banks, but in financial companies. The advantage of this method is the provision of a loan in a short time, without providing certificates of earnings and studying the borrower's credit history. But with high chances of getting the required amount, high interest accrued and, accordingly, significant overpayments are considered a disadvantage.
2. Registration of a credit card is an effective way to get a small loan with a bad credit history. The interest in this case is higher than when applying for a regular loan, but if the money is needed urgently, then obtaining a card is relevant and timely.
3. Lending with a pledge of property, which is a kind of guarantee for the bank to pay off the loan. Loans against collateral are offered by many banks without taking into account the data of credit history, so the chance of borrowing a decent amount is quite high.
4. You can apply for and get a loan with a bad credit history with the help of a reliable guarantor. In this case, the bank offers quite acceptable interest, and the amount depends on the income level of the guarantor. It remains only to find a person who agrees to act as a guarantor and, in the event of financial problems for the loan recipient, will undertake payment obligations.
5. Contacting a loan broker is an option that is used in cases where the previous methods of obtaining a loan with a bad credit history are not effective. Brokerage companies charge a decent fee for their services, and in some cases may require an advance payment before receiving funds from the bank. The broker cannot guarantee the issuance of a loan by the bank, and in case of refusal, the paid advance does not return. If the bank nevertheless issues a positive decision, then at the expense of the broker's commission, the borrower will receive one amount in his hands, and he will have to pay for a completely different, much larger one.
To avoid the question of how to get a loan with a bad credit history, you need to really assess your financial capabilities and exclude the appearance of debt. If the circumstances are such that a delay in payment is inevitable, then you should contact the bank in advance and ask not to leave negative reviews, but to provide a credit vacation, delaying the planned payment and not charging fines.
