You’ve undoubtedly seen numerous lending companies online advertising loans with bad credit, and if they’ve given you something to think about, keep thinking. There are lenders out there that are honest and willing to deal with people that have bad credit, but it’s important that you understand a bit more about the process in general. There are a few things that lenders don’t want you to know and won’t readily tell you!
1. Be prepared to pay higher interests rates when you get approved for loans with bad credit. It’s certainly a good feeling to finally have the approval of a lender, but you do need to calculate in the fact that you’re going to be paying a lot more back than you initially borrowed. Interest rates soar for people with bad credit, which is why it may be a better idea to try raising your credit score first.
2. Bad credit lenders will make inquiries into your credit score, which can actually harm your credit rating in the long haul if they’re categorized as hard inquiries. Soft inquiries, on the other hand, they won’t affect your score in any way. Make sure you know before applying for a loan what type of inquiry the lender makes.
3. Even lenders that deal with bad credit use your credit score in the determination process. For example, peer to peer lending platforms display your credit score in your profile where potential investors can see it.
There is a darker side to bad credit loans than people are letting on. It’s important that people looking to get a loan understand the importance of looking at a lender’s background. A bad credit score shouldn’t give anyone the ability to steal your information or to bully you into a bad deal!