Have you heard the statement that getting a personal loan is extremely easy?
Yes, it’s a popular statement which banks usually use to craft their marketing strategy. But, they never highlight the “conditions applied “factor.
Getting personal loan is really quick, but, only with a clear credit history. It’s because of the nature of the loan. A personal loan is an unsecured loan as the receiver of the loan doesn’t need to keep any asset for security. This raises the risk factor for bank’s multi- fold. Now, you know why they care so much about you past credit history.
But what if your credit history reflects a poor impression? Hence, it’s imperative that you consider certain factors to get loans even with a low credit past statements. Here are the top 5 things you need to consider:
Home equity line of credit
If you have equity in the property you own, it can become an essential solution for getting a personal loan. However, it does put your property at risk but if you have a steady flow of income and a secure job profile than its fair taking the risk. Using an equity line of credit you can avail loan with low-interest and tax deductible line of credit. This gives you enormous flexibility to spend your loan amount without any conditions and restrictions. However, do compare the available rate of interest in the market to get lower rate of interest.
Bad credit loans
Another option could be to apply for Bad credit loans. There’s a separate provision being made to avail loans to customers with poor credit history in the form of bad credit loans. However, the high rate of interest could pose a problem as banks posses an all time high rate of interest over such loans. Other than a high rate of interest, there’s also limit imposed on the amount of loan bank will render you. Hence, you need to be extremely careful while going this route and compare the policies of various banks in respect to bad credit loans. It should be worth paying high rate of interest.
Credit union loans
Getting a loan from credit unions is comparatively way easier than getting a loan from a bank. As the former have much easier credit standards. Even getting a membership in credit unions is also fairly simple and relaxed. Almost anyone can become its member despite being from any profession. It’s because of the nature of the unions. Such unions are not established with the motive of earning profit rather they NPO ( not for profit organizations) which avail loans with much cheaper rate of interest and high customer satisfaction. However, there few limitations are that being an unsecured personal loan they have a comparatively much shorter period of loans. Also the amount you can borrow depends on your credit score and loan type.
Getting a best loan with bad credit is often a problem. As different banks have different provisions for such loans. It’s also due to the nature of the loan and the high rate of interest. Hence, these are things you need to consider, if you want to apply HDFC personal loans or any other loan.