Your credit score is not the only determining factor of whether or not you will be approved for a personal loan for bad credit. Here are some other factors that can help your chances:
Credit History – Bad Credit Personal Loans for people with no credit history, on the other hand, may require co-signers such as parents. The lender must be certain that the borrower will repay the loan.
Verifiable Income – Personal Loans for Bad Credit lenders understand that everyone has to start somewhere, and while they can not base their decision solely on this factor, having a verifiable source of income is necessary for getting a loan.
Savings and Checking Accounts – Lenders look at savings and checking accounts to determine if you have the ability to repay your loan. Most lenders are now requiring at least 3 months of bank statements in order to verify where your income is being deposited and how often it is being spent.
Borrowers who are applying for a private student loan should be aware that banks require co-signers for loans with a high balance. Borrowers who have experienced bankruptcy in the past are also often required to obtain cosigners for private student loans. Students can find lenders that do not require cosigners, but they will generally charge relatively high interest rates in return for this leniency.
Address Verification – Most online lenders will verify your address before they will allow a loan to be processed. This is done either through a phone call, email or fax request. Many online lenders use a national database that provides an address verification report for their clients.
Income Verification – Most personal loans for bad credit require income verification from the borrower’s employer to ensure they have enough income to repay the loan.
Job Stability – Lenders will verify a borrower’s employment status to determine whether they have the ability to repay the loan. Some lenders may even ask for proof of income from self-employed borrowers. Many people who feel that they cannot qualify for a personal loan from their local bank because of poor credit tend to apply with online payday lenders first. This can be a costly mistake; payday loans are for very short term financial emergencies only, not as an alternative to personal loans for bad credit.