Someone who wants or needs to borrow money is already facing the pressures of inadequate funding, a tight deadline, or both. Why add the stress of high-interest loans, worries about credit scores, and grueling application processes? Could there be a better way for an individual to get the financial aid they need without jumping through a lot of hoops?
Fortunately, there is indeed a better way: personal loans with low interest rates. We’ll describe these more in detail later on, but for now let’s backtrack to that part about credit scores. What are they, exactly? What does it mean to have a good or bad credit score? Does a bad score mean that applying for financial aid would be hopeless? Who checks all of this, anyway?
We’ll answer all of these questions, and then get to the meat of how an individual can obtain low interest personal loans with bad credit. Let’s get right to it!
A credit score is, in essence, a rating that is given to an individual which measures how likely that person is to repay (or not repay) money that he or she might borrow in the future.
A credit score is usually determined based on the individual’s credit history, which is a record of their performance in repaying previous loans. If a person consistently pays off the balance on their credit card, or has a large number of previous loans which they successfully repaid – on time and in full – then this person would be considered worthy of receiving further credit, and therefore have a good credit score. This would make it easier for that person to borrow money from certain lenders in the future.
But not all types of lenders place a lot of importance on a borrower’s formal credit score. So which ones do, and which ones don’t?
Banks will very often make it a point to review a borrower’s credit score before lending them any money. This is because the bank naturally wants to be as certain as possible that a borrower will be able to repay the loan completely, and on time.
In addition to the credit score, a bank is also likely to review other information about a potential borrower, such as their current income level. This income may need to meet or exceed a certain threshold before the bank would consider lending the person money. This is a serious consideration for entrepreneurs, freelancers, and self-employed people who want to take out a loan, because these individuals often have volatile or unpredictable levels of income.
A bank’s loan application process may also be quite extensive, taking lots of time and energy to complete.
All of this doesn’t necessarily mean that banks are a bad choice for borrowers, or that banks should never be considered as an option. But it’s best to keep in mind that a bank is probably going to have many requirements which borrowers will need to fulfil in the process of taking out a loan.
Let’s say you want to borrow money. This could be for the purpose of investing in a small business, building up funds for an important project or event, or any other reason; personal loans are quite flexible, after all. However, you have a low credit score, or would simply prefer not to turn to a bank for funds. Given this, what are your other options?
It might occur to you to ask friends or family members for an informal loan, but this is almost always a risky move, as it puts your personal relationships at stake in case of problems down the road.
Taking out a loan with unlicensed moneylenders is an even bigger risk, as these lenders are unregulated; they often charge interest rates and lend sums of money that are outside of what is legal.
The safest and most convenient option – one that allows you to borrow money quickly and easily, without needing a great credit score, and while staying within the bounds of the law – is to use a licensed moneylender.
(If you are considering a particular moneylender, you can ascertain whether or not they are licensed by checking this list provided by the Ministry of Law. If the moneylender you have in mind is not on this list, run for the hills.)
Friday Finance is a licensed moneylender that can provide the personal loans you need for a startup business; life events such as weddings, funeral services, or relocations; income advances to help you cover short-term costs; emergency funds; and more. With Friday Finance, you’ll be able to borrow the money you need regardless of previous or existing loans, and enjoy a fast and easy application process as well as flexible repayment periods.
Best of all, Friday Finance takes current and future earning capacity – not just a previously established credit score – into account when assessing a borrower. This means more leeway for entrepreneurs, freelancers, and self-employed borrowers to get the funds they need.
You can learn more about the loan eligibility criteria you’ll need to meet when borrowing from us. If you have other questions in mind, you’ll probably find the answers here. And if you’d like to know more about the benefits of licensed moneylenders, there are at least five more reasons to choose them.
Borrowing money as an individual with a low credit score doesn’t need to be impossible, or even difficult. Licensed moneylenders like Friday Finance are your best bet to get the funds you need.
Ready to make a new loan application? Get started today!