Bank Loans Despite Bad Credit: How to Get One

You are probably like the rest of us and over the years have made a few mistakes financially causing you to have bad credit. If you are over the age of 18, chances are you have been late on at least one credit payment, or defaulted on a loan. Does that mean you should be scared for life?

Perhaps you have been turned down by a few banks due to your bad credit; that does not mean you can not qualify for a bank loan.

Naturally your chances of a loan are based on your credit history. There are some circumstances that can affect your chances worse than others.

  1. Credit score - A credit score of 580 or lower will severely limit your options.
  2. Multiple credit checks - Checking your credit score too often can affect your credit rating.
  3. Creditor malfeasance - If you have recently filed for bankruptcy you may only be able to get a high-interest loan or a restricted credit card.
You should know what your credit rating is and sit down with a financial advisor to find out exactly how bad your credit really is. It may not be as bad as you think.

Even if your credit is bad you may have some options to secure a bank loan. Naturally, the interest rate will depend on the severity of your credit and the higher the interest rate the larger your monthly payments will be. Also, a high interest rate will increase the entire amount paid over the life of the loan.

Second Chance

When applying for a bank loan with bad credit it is pertinent that you discuss your situation with the loan officer upfront. The chances that they can help you secure a bank loan will greatly improve if they know in advance that you are aware of your bad credit mistakes and that you have learned your lesson and desire a second chance.

One surefire way to do this is to only borrow what you need. Borrowing more than necessary is one way to get you into even deeper debt.

While many bad credit loans are conducted online, you are much better off to consult a loan officer in person. When meeting the loan officer be sure to have all the necessary documents and information with you.

  1. Bring your Driver's license for identification.
  2. Have your social security card with you. A bank cannot loan you money without your personal Social Security number.
  3. You should bring any documentation that will serve as evidence of assets you may have. This proof of ownership may help you secure the loan as it could stand as collateral. Sources of this proof of ownership include property deeds and vehicle titles.
  4. It will be vital that you are able to prove any primary and secondary income.
  5. You should also bring proof that will explain your previous bad credit. The better you can explain your previous mistakes the better chance you will have of securing a bank loan despite bad credit.
When re-establishing bad credit through a bank loan it is of the utmost importance that you do your best to negotiate the best interest rate to assure that your monthly payments are affordable.

Be sure to examine the terms of the loan before signing the application, be sure that all of the terms of the loan are the terms you agree to so there are no surprises later.

While securing a bank loan with bad credit may be difficult, you still have options. If you do secure a bank loan stay on top of your payments and do everything in your power to get the new loan paid off in a timely manner. 

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