What is a personal loan? A personal loan is a loan taken from a bank or a financial institution for personal use. These loans are generally unsecured loans and are repaid in installments over a period of time. The repayment schedule of your personal loan decides your credit ability for future loans from banks and financial institutions. Credit history also depends on lacking of payments of credit cards, bills and other type of loans. Hence, keeping a good track of your finances is the best option to prevent falling in the list of bad credit history. This is where Bad Credit Loans comes into picture. hitta lägst ränta på lån here.
Who opts for personal loan?
People generally opt for credit card at higher interest rate or bad financial habits for their personal expenses. But a problem in repaying them causes them to fall into bad credit list. That’s when people think of personal loans.
Personal loans are for people with bad credit history, people who do not have any security towards the loan in case of non-repayment and too many late payments/no payments of bills that reflect in their bank statement.
You can take a personal loan and close all other dues that you have.
So, what is required to get a personal loan?
If you have the below documents/proofs you are eligible for Bad Credit Loans:
- A steady income
- Address proof
- Identity proof/Social Security number
- Above the age of 18yrs
How can a personal loan help?
When you take a personal loan which is at a lower rate of interest and repay the other loans, that would certainly improve your credit score and also while you repay this loan your credit score would improve further.
How should you proceed and what are the points to keep in mind while opting for a personal loan?
Be open to the fact that your bad credit score would definitely have some impact on your personal loan.
The lesser the score, the less would be the lending from the financial institution. The impact may be that – you may be given less amount of loan or a loan at a higher interest rate. Hence, there are certain points to keep a note of while opting for a personal loan.
- Opt for a personal loan only in case of emergency.
- Do not take a personal loan for party, holiday, to buy gifts etc.
- Also, do not take a personal loan due to your eligibility, consider it only if you need it.
- Choose between the banks and financial institutions while taking the loan in terms of interest rates, loan amount, processing fee, late payment charges etc.
- Choose diminishing rate of interest rather than flat rate of interest.
- Do not take more than what you can repay or rather not more than 10% of your salary should be paid as an installment every month.
- Try to close the personal loan as soon as possible and when doing that, do bargain to reduce the pre closure charges.