Banks or financial institutions grant loans based on your creditworthiness. This means you should be able to repay the loan regularly and in time. However, many a times you may not have a strong credit history to back yourself. There may be instances where you have defaulted on a loan, missed your credit card bills, or may not have taken any loan at all in the past. In these cases, a borrower is said to have bad credit.
Even though you have bad credit, you may require to avail of a loan due to certain emergencies. However, is it possible to get loans with bad credit? Yes, there are ways to get a loan with bad credit history and a good one in that case.
Before considering a loan from a bank and waiting endlessly for its approval, you may want to explore certain options for yourself. You may think of a car mortgage loan by putting your only car as collateral or think of availing a credit card. However, these options may not work because you would not want to put your car at risk or get into the hassles of owning a credit card. In that case, the best loans for bad credit are:
1. Personal loans
These are unsecured loans, which are available without the need to provide a guarantor, security deposit, or pledging any asset. You can avail of a personal loan for any amount and repay it in flexible instalments. You can choose to put a mandate to get the equated monthly instalments auto-debited from your account. A personal loan can be utilized for any purpose and is granted on the basis of your current income level rather than your credit history or credit score.
2. Loan against fixed deposit
Fixed deposit is one of the most conventional investment avenues in India. Almost every Indian has a fixed deposit account in his bank. Did you know that you could put your fixed deposit to use by availing of a loan against it? There is no credit appraisal or documentation process required. All you need is a fixed deposit in the bank you are applying a loan with. Here, the fixed deposit acts as a collateral against which you are provided instant cash. The loan approval is instant. You are allowed to avail of 60% of the amount as a loan in case of a non-cumulative fixed deposit and 75% of the amount in case of a cumulative fixed deposit.
3. Payday loan
This is a short-term unsecured loan, which allows you to access instant cash. You can avail of this loan even if you do not have a decent credit score. The amount disbursed for this loan ranges from INR 10,000 to INR 50,000. The best part about the ’payday loan’ is that it is disbursed on the same day. The repayment tenure for these loans is between 30-90 days. The loan is approved based on your current income and you need to service the loan from your salary. This is why this loan is known as a ‘payday loan’.
It might sound a little difficult to think of availing a loan for bad credit, but there are many options. You can also increase your chances of the loan approval by following the below-mentioned steps:
- Have a good earning potential at present
- Be prepared for a high rate of interest
- Get a co-applicant on board to show supplemental income
- Start rebuilding your credit history by taking corrective steps
- Choose to show a collateral
Mentioned above are the three practical solutions to obtain the best loans for bad credit. These loans will give you instant cash without the hassles of documentation, credit appraisals, or endless loan applications. Even if you have a weak credit history, you can solve your immediate cash needs by going for these loans.
You can apply for a Bajaj Finserv Personal Loan with Finserv MARKETS online and take care of your urgent needs and requirements. What’s more? The entire process is online, easy and can be processed right from the comfort of your home. So why wait? Choose us and avail a personal loan with us today!
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