Increase your chance to get
Bad Credit Loans
Having a poor credit score is not the end of things, you can still secure a loan from finance companies. However, you will have to work hard to assure the lender that they will recover their money.
Finance Companies are in the business of lending money. If you can assure them beyond reasonable doubt that you will repay the principal plus the interest, they will not hesitate to do business with you. Lets look at how we can increase our chances of getting a bad credit loan in New Zealand.
What to do if you have a bad credit rating
There are several things that you will need to make sure that your poor credit score is not affecting and jeopardizing your financial future.
Go and talk to your banker: You cannot hide in the shadows no matter how poor your credit rating is. Go out there and talk to your banker. The banker in most cases will have a solution for you. They have seen such many cases and definitely, they know the way out. If you make them like you by being genuine, they will most probably want to help you. The system is run by human beings and so, some social and psychological skills will do the job.
Explain what caused your poor credit score : The worst thing you can do is try to bury your poor financial past and not want to talk about it. If you do not try to explain what caused your poor credit score, the bankers will still judge you by your past.
After you visit your banker, acknowledge that you have a poor credit rating and give an explanations to why it is so. If you defaulted on a loan, let them know why. If something tragic happened to your business or your job, let them know. Do not be shy or fear looking weak. By dealing with that past, you will let your banker know that it was the situation that was unfavorable at that time. They will know that it is not your nature to borrow money and then fail to pay intentionally.
Visit as many lenders as possible : Lenders have different policies when it comes to lending. Some lenders may be more tolerant of borrowers with a poor credit scores than others. Always make sure that the first thing when you meet with the banker is to explain the situation you are in other than letting them check and ask you about it. This makes you appear honest and genuine
How to increase your chances of getting a loan with bad credit
There are specific strategies and tactics that you can use to ensure that your loan application is successful even if you have bad credit. We are going to discuss a few of them in this article.
Have a tangible security : This is also called collateral. It is something you offer to the bank in case do not repay your loan as agreed. The bank can always seize the asset and auction it to recover the principal advanced and the interest payable.
Tangible collateral is mostly a car log book or a title deed for a piece of land. In this case, the bank will mostly have no objection to giving you a loan because they can always recover their money after selling your asset.
Have a guarantor : A guarantor is a person who offers to repay your loan in case you fail to pay it back. If you fail to repay, the financial institution will force the guarantor to pay the loan you owe. If you have a poor credit score, the lender will require you to have a guarantor who has a good history when it comes to paying loans back. If you try to have a person with a poor credit score be your guarantor, the lender will reject your loan proposal because they cannot trust your guarantor either.
Getting a guarantor is not easy especially if your credit score is poor. The guarantor has to be someone who relates to you at an emotional level and not a logical level. This can be a relative or a friend.
Visit financial institutions that lend bad credit loans : There are specific financial institutions that lend to bad credit borrowers. This is in their business model. These lenders have put in better systems to recover their money but they also charge a higher interest rate than what you would pay for a normal loan.
Go for a payday loan : A payday loan is a short-term loan that is repaid the next time you get income. This is mostly at the end of the month. These loans involve less money, say $500 or less. They also attract high interest. The payday loan is mostly paid with no installments.
Most payday lenders do not check your credit rating and thus, it is an easier loan to access.
Get a letter from your employer : You can get a letter from your employer to act as extra security for the lender. The employer can agree to deduct the loan amount from your salary in case you do not repay your loan.
Co-borrow with your partner : Co-borrowing is a common term nowadays. You can apply for the loan together with your partner. The more the people involved, the better it is for the lender in terms of recovering their money.
Need Help with Bad Credit Loans ?
Do not give up due to a poor credit score. The above-stated strategies can help you secure a loan despite your poor credit rating. If the lender can be convinced beyond doubt that they can recover their money, they will give it to you regardless of your credit score. It is not guaranteed that all these strategies will work for all lenders. After all, lenders are different. Just visit your banker and see what works and what doesn’t. Let us help you get bad credit loans in New Zealand. Be our next success story !