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Getting very poor credit loans in 2021 is quite easy. However it seems impossible to you to get approved for very poor credit loans, but trust us it’s possible to get approved for what you required, just make sure you apply for what you can payback on time monthly installments.
No one really want to have Poor credit score,it’s that status no one by their own set voluntarily. Most of the time it is because lac of financial knowledge. and ignorance of getting perfect credit score. sometimes A divorce, the onset of a serious illness, or career crisis can turn good credit into bad credit in short period of time.
However all these aspects there is always options for you if you have a bad credit. They won’t be under the best of terms, but they can be really usefull when absolutely necessary to get one.
Lending options for people with very poor credit
Loan aggregators
When you have bad credit loan aggregator is the one of the excellent choice you can opt for, Loan aggregators aren’t direct lenders, but a large number of lenders participate in the platforms. Since they serve all credit levels, you may be able to get qualify for very poor credit loans or even for having no credit at all. You fill out a loan request, and lenders that will lend to your credit profile will make offers.
Don't waste your time. Get a loan online.
The most popular aggregator: Motiveloan. With Motiveloan, you complete a single loan request by applying online, and potentially dozens of lenders form panel of lenders come to you and make offers. You can select the one you like best.
Peer-to-Peer (P2P) lenders
P2P might be the best sources for financing when you have very poor credit. You’ll pay high interest rates. like say as high as 36%. But they do offer fixed rate, limited term loans that don’t require collateral as a security.
You know what,these loans can be used for just about any purpose. You can use them for debt consolidation, starting a business, or even purchasing a car. The most popular P2P lenders include MoneyTree, Avant.
Loan sources to be careful of
Banks and credit unions
Banks’ decision for lending are strongly based on one’s credit score. If your credit score is below 600 most will not make a loan to you. Credit unions are the better of the two, particularly if you have money on deposit with them. They may make a loan if you add a cosigner, but it will depend on the credit union. Most have credit score cutoffs, and will not lend below that level.
Payday loans
These are predatory loans, designed specifically for people with very bad credit. That’s why they’re best not to apply for and you should avoid taking one. Basically, they provide a loan advance against your next paycheck. The interest rate can exceed 400%, and they will require access to your bank account to withdraw funds when your next paycheck comes in. If you fail to get paid, and pay off the payday loan, then i can become worst for you as compared to your current situation.
Mortgage with very poor credit
Before the Financial crises of 2008 it was possible to get a mortgage with poor credit. But this was done through subprime mortgages, which are no longer commonly available. That’s not a bad thing either. Subprime loans usually required down payments of 20% or more, came with high interest rates, had a two-year fixed payment, then adjusted every six months thereafter, and charged a fat penalty if you tried to pay off the loan within the first two or three years.
As a result of that debacle, the mortgage industry has tightened credit standards. As a general rule, lenders won’t make loans to borrowers whose credit scores are below 620. And even if you are a little above 620, you’ll pay a higher interest rate.
Even now, some mortgage lenders will approve an FHA mortgage with a credit score as low as 580.
But 580 to 620 is in the “fair” credit category. If you have bad credit, your credit score is below 580.
If it is, your best option is to try an FHA mortgage with a 10% down payment. FHA loans normally require 3.5% down. But with a higher down payment, they may accept a credit score below 580. Best of all, the entire 10% down payment can be get from a family member.
Salvation on the refinance front
It may be easier to get a mortgage for a refinance than for new a purchase, even if you have very poor credit. There are three programs you may be interested in if you need a refinance.
HARP
This is a government refinance program for conventional mortgages. To be eligible, you must meet the following criteria:
- Your mortgage must be held by either Fannie Mae or Freddie Mac.
- It must have been originated and closed before May 31, 2009
- You haven’t used the HARP option in the past.
- You’re “upside down” on your home – meaning either the property has declined in value, you owe more on the property than it’s worth, or you have very little equity.
- You can have no more than one 30-day late on your mortgage within the past 12 months, and none in the past six months.
FHA Streamline Refinance
This is a simplified refinance program strictly for existing FHA mortgages. The loan offers reduced documentation, and on the credit side, requires only that your existing mortgage be current (all payments made up to date).
VA Interest Rate Reduction Refinance Loan (IRRRL)
If you’re an eligible veteran, and you’re looking to refinance a VA mortgage, you can use this program to do it, even if you have bad credit.
Solutions for people with very poor credit
Earnin
Earnin lets you get access to your paycheck before payday actually rolls around. But that’s not the only good news – Earnin is completely free!
You can get access to up to $100 per day and the next time you get paid, Earnin will automatically deduct the amount borrowed from your paycheck. There’s no interest to worry about, and you can pay whatever fee you think is fair.
You can also set an overdraft alert that lets you know when you’ve gone below a certain amount in your bank account.
Borrowing from family and friends
Use this option only in an emergency situation. It’s bad enough if you have late payments or if you default on a bank loan. But if you do it with a personal loan from family or friends, it can permanently destroy your relation and make things bitter between you.
How to improve your credit score?
So now you know that Bad credit locks you out of mainstream lending sources, forces you to find loans from unlikely places, and leaves you paying high interest rates under very strict terms.
So it’s obvious that you want to get out of the situation and take control of your financial condition – as soon as possible. In fact, the best borrowing strategy of all if you have bad credit is to improve your credit score before applying for the next loan.
There’s no simple short way to improve your credit score. It will take months, even years, depending on the causes of your rating. You should also avoid shortcuts, like turning to credit repair services. They’ll charge you a bunch of fees, and they may or may not significantly improve your credit scores as well.
