Personal Loans For People With Bad Credit
Getting personal loans for people with bad credit can be especially challenging if you are hoping to secure a loan through any of the mainstream banks or financial institutions.
However, for people with a poor credit history, there are some ways other than by getting rejected by the traditional banks to secure loans from lenders who do not fall into the “loan shark” category.
Even if you are still building a credit record & do not have an established credit history you could be viewed as a high risk client & may struggle to get loans through the traditional lending avenues.
5 Tips For Getting Loans For People With Bad Credit
- Access your home loan or bond to raise the funds you need – it is a far cheaper way of raising money than by getting a loan as the effective interest rate is far lower & tax free
- Only approach lenders who are registered with the NCR (National Credit Regulator) to ensure that you are dealing with a reputable organisation & won’t be subjected to unrealistic repayment terms.
- Shop around by comparing various loan companies to ensure that you select the one that offers the lowest interest rate as well as the most favourable repayment terms before signing & committing to their terms & conditions for your loan.
- Remember to check that the loan provider is registered with the NCR which regulates the industry in terms of the NCA (National Credit Act) to protect the consumer form unscrupulous lenders & sets the maximum fees & interest rates that lenders may charge.
- Get a loan from a friend or family member or someone you know & treat it just like a serious business transaction by having it clearly documented in legal terms with the loan period & repayment amounts clearly highlighted and signed by all parties.
Criteria For Getting Loans For People With Bad Credit
Generally the applicant will have to comply with the following criteria to qualify for bad credit loans;
- You must be permanently employed
- You must be able to provide proof of employment & income – generally you will need a monthly income of more than R3000,00
- You must be older than 18 years of age & less than 65
- You cannot be under debt review, debt counselling or under administration
- You cannot be currently sequestrated
- You must be a citizen of South Africa with a South African ID (Identity Number)
If none of the above tips & information help, your best option is to do your best in improving your credit score so that you can get loans at the best interest rates through the traditional banks & lending institutions.