It would be nice to think that all that was needed to secure a loan is a quiet conversation with our friendly loans officer at our local bank. But the reality is very much different. Complying with criteria and having the documents to prove it are essential, especially when seeking a personal loan with bad credit a factor.
In recent years, the financial situation for million of American has worsened. The result is that a higher percentage of people seeking loans have low credit scores – more often than not out of no fault of their own. Unexpected redundancy, a reduction to part-time employment and a myriad of other reasons for an income decrease means that personal loans with bad credit are needed just to keep everything afloat.
Getting as close as possible to a guaranteed loan approval with bad credit comes down to a number of factors. Principal amongst them is having a well-prepared application, one that not only provides all of the necessary information but shows that the applicant has the right attitude in taking on the loan.
What Makes a Well-Prepared Application
When putting together an application, there is a short list of items that cannot be left out. It is only logical that lenders that provide personal loans with bad credit will want proof of a number of details. After all, if it were all down to just a friendly conversation, anything could be said or claimed by the applicant.
There are four items that are considered essential to any application for a personal loan with bad credit. Firstly, lenders require 2 types of photo identification, with drivers' license, passport and social security card the most commonly accepted. Secondly, some kind of proof of residence like a recent utility bill.
Thirdly is proof of employment and income. These can both be provided if a recent pay stub is provided. Finally, to close in on that guaranteed loan approval with bad credit, bank account details have to be provided. The chief reason is that they can arrange payment to be made automatically on the payment date directly from the account.
Keeping It Real
Of course, all of this is pointless if the size of the loan being applied for is wildly out of proportion with what is realistically affordable. Many applications for personal loans with bad credit are rejected simply because the amount begin sought is too high.
For example, if an applicant has a monthly income of $ 3,000 and has outgoing of $ 2,000, it might seem that they can afford a personal loan requiring monthly repayments of $ 1,000. But lenders stick rigorously to the debt-to-income ratio, which dictates that a certain amount of income must be reserved for the unforeseen expenses that life dishes out.
So, this application will be turned down on the basis that no income is left over. More acceptable would be repayments of $ 400 or $ 500. So, it is important to calculate what is affordable first if guaranteed loan approval with bad credit is to be enjoyed.
The Online Option
Finding the best loan terms is vital if the loan needed is to be secured. Unfortunately, this tends to exclude traditional lenders, like banks, as their terms for personal loans with bad credit are usually poor. For lower interest rates and higher loan limits, online lenders win out almost every time – so the required personal loan is within reach.
However, as with everything on the internet, it is important to check out who the lenders are by consulting the Better Business Bureau website. Though a guaranteed loan approval with bad credit is rarely certain, the website will guarantee a lender that can be trusted. Then the borrower is free to enjoy the benefits of their personal loan with bad credit.