Life is full of the unexpected and sometimes you just don’t have the funds to handle what it throws at you. A personal loan can help some people bridge the gap when faced with life’s curve balls. But what loan options are available for people who struggle with a poor credit score? We’ll take you through the easiest personal loans for bad credit, how to apply, and look at whether a personal loan is a good idea for you.
Overview:
- What is the easiest loan for bad credit?
- How to apply for a personal loan with bad credit
- Is a personal loan a good idea?
What is the easiest loan for bad credit?
The “easiest” loan typically depends on your specific financial situation and the loan terms available from different lenders. Secured loans are generally more accessible, as they allow you to use an asset—such as a car or property—as collateral. This reduces the lender’s risk, making approval more likely even with a poor credit history.
What are the best personal loans for bad credit?
While getting a loan can be trickier when you have bad credit, it’s not impossible. Finding the best personal loans for bad credit will depend on your individual circumstances and financial goals. Before making any financial decision or applying for any type of loan, it’s a good idea to consider:
- How much do you really need to borrow?
- What is the comparison rate? i.e. what is the true cost of the loan?
- How much can you afford to repay?
- What are the terms of the lender?
- Are there any hidden fees or charges?
- How will a loan affect your future financial goals?
Once you have considered the above, you can start shopping around for lenders and loans. Online lenders, credit unions or lenders offering secured loans can be a good place to start.
What is the lowest credit score to get a loan?
There isn’t a set minimum credit score required to qualify for a loan, as approval depends on the lender’s individual criteria. While higher scores tend to improve your chances, some lenders may still consider applications from those with lower scores, particularly if other aspects of your financial situation—such as income or collateral—are strong.
Keep in mind that a lower credit score may limit your options and could result in less favourable loan terms, such as higher interest rates or smaller loan amounts.
How to apply for a personal loan with bad credit
Applying for a personal loan with bad credit is relatively simple, especially with the rise of online personal loans for bad credit in New Zealand. The application process typically involves several key steps:
- Check your credit score: before applying, it’s important to know where you stand. To check your credit score, you can request a free credit report from the three main agencies; Equifax, Centrix or Illion.
- Compare lenders: take time to compare the rates, fees, and repayment terms.
- Fill out the application: prepare all the documentation you need and fill out the application.
- Wait for approval: most online lenders will process it quickly and notify you of their decision within a short period. Some may offer same-day approvals, while others might take a few days.
- Receive the loan: once you have been approved, the loan amount will be transferred into your nominated bank account in one lump sum for you to use as you wish.
When considering whether to apply for a personal loan with bad credit, it’s crucial to ensure that you can meet the repayment terms. Missing payments could negatively affect your credit score even further.
Is a personal loan a good idea?
Depending on your individual circumstances, a personal loan can be a suitable option. A personal loan can be useful when:
- Handling emergencies or facing unexpected costs
- Paying for larger planned costs like holidays, home renovations, or medical procedures
- Making larger purchases such as furniture, vehicles, or appliances
- Consolidating debt
While personal loans can be useful, they can have a negative impact on your finances when not managed correctly. To manage your personal loan correctly, make sure you:
- Never borrow more than you can reasonably afford to repay
- Make timely repayments
- Notify the lender directly immediately if you’re struggling to make your repayments on time
Feel like poor credit is holding you back? Swoosh is here to help!
At Swoosh, we believe your past shouldn’t define your future. That’s why we offer fast, flexible bad credit loans starting from $2,000. Apply online today to get started!
FAQ
What is a hardship loan?
A hardship loan is typically offered to individuals facing difficult financial circumstances, such as job loss or medical emergencies. These loans often come with more flexible repayment terms to help borrowers get back on their feet.
If you are struggling with debt or need advice, MoneyTalks is a free helpline offering advice and support to individuals struggling with financial hardship.
Will anyone lend me money with bad credit?
Yes, there are lenders, like Swoosh, who specialize in providing loans to individuals with bad credit. These lenders may offer personal loans for bad credit with more lenient approval requirements, though they may charge higher interest rates or charge certain fees.
How can I get a loan when no one will approve me?
If you’re struggling to get approved for a loan due to bad credit, consider:
- Taking time to improve your credit score first to improve your chances of approval
- Borrowing smaller amounts
- Applying with lenders who specialise in bad credit loans or have more flexible eligibility requirements
- Borrowing from trusted family or friends – when borrowing money from friends or family remember to have clear and open conversations about expectations so as not to damage your relationship.
