Low Credit Score Loans - Tips for Availing the Finance

By: Ashley P Lewis

Because of repeated payment faults, a borrower's credit score plummets to new lows. This implies that the borrower carries very high risks and chances of taking out a new loan become grim. Hence, Low Credit Score Loans will depend on winning the loan providers' faith.

On FICO scale, a score of below 550 is a low score. This indicates that you made many payment faults in the past or you had arrears, defaulted on payments and had CCJs. With such a score, your chances of getting a loan are bleak. Even if you get the loan, its terms-conditions are harder to meet and rate of interest sometime goes sky high.

Therefore, you should start saving some money and pay off your debts. Gradually, in few months, your rating will improve. This will give indication that you are now serious over repaying the loan on time.

You should get free copies of your credit report from the major bureaus. Since, the report functions as a document of assessing the risks, ensure that the report has made adequate mention of your all the payments. You must correct the report, before applying for the loan.

Ensure that you have made a convincing loan repayment plan that includes your income and monthly savings. You should borrow an amount, keeping this plan in mind.

With a low credit score, be prepared to pledge some property like vehicle or home, as collateral. Such a secured loan approval will come with comparative ease. If you intend to borrow smaller amount, without collateral, then opt for the unsecured loans. The rate of interest will go higher.

You will find many low credit score loans on internet. Compare them for their rates and terms-conditions. Compare their additional fees as well, to find a suitable deal. Make timely payments towards the loan installments for improving your rating.

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