Looking for business financing is a challenging process. Bank loans are nearly impossible to obtain, so business owners often look for alternative financing methods. One of the most popular options is personal loans.
Personal loans can be a life-saver – if you can use them in the right way. However, as North Shore Advisory, Inc reminds us, securing the loan can be complicated when you have a bad credit. So, what can you do to get personal loans for your business when you have a bad credit rating? Read on.
Indeed, having bad credit can definitely leave you discouraged about your chances of securing a personal loan. However, there’s no need to hang it up; there are sources in the online space and off that are committed to helping you out.
Before you embark on seeking out small personal loans for people with bad credit, you should first understand what numbers denote bad credit. This can only be obtained by getting your credit report, and becoming familiar with your credit history.
First, acquire your credit reports from the three major credit bureaus, so that you can cross-check the scores. What’s the utility of this? You may find something that doesn’t add up, since different methods are used to assess your creditworthiness by each one. Changing any of these figures could potentially lead to a rise in your FICO score, which is always a good thing since the interest rates for which you’re eligible are based on this; in part.
Shop For Lenders Online and Off
Of course it’s much easier to begin your search online these days, and some of the best deals are available there anyway. Just make an uncompromising plan to send all your applications in within a two-week period – no more than a month, though – so that your credit score doesn’t take a hit as a result of all the hard inquiries that your potential lender will have to make to assess your creditworthiness.
As long as you have a lot of inquiries within an approximately two-week period, then they only count as a single inquiry – hence the prescribed time frame. You’re always trying to build your credit score to the prime lending rate, so you don’t want to do anything that unnecessarily lowers it.
Banks and Credit Unions
Speaking of trustworthy lenders, credit unions often have lower rates than even the large banks; it’s a result of the need to be competitive. Thus, they are known to work out favorable deals with people with bad credit, and you may be next in line for receiving a personal loan that you can handle (the monthly payments).
Any of the major banks – such as Discover, Capital One credit cards, Bank of America or US Bank – offer personal loans. Since they’re in competition with each other, you can expect the interest rates to be as competitive as possible. Unless any specific offering is geared towards people with exceptional credit, then you’ve got a good chance at securing one with satisfactory interest rates for your current credit level.
The Peer-to-Peer Option and Online Lenders
If your name is in the credit card system – and chances are very high that it is – then you’ve probably eceived letters from P2P lenders such as The Lending Club and One Main Bank. These aren’t affiliated with the large banks, and there’s a chance that they offer you lower interest rates than the latter.
The online option, as stated above, is often an even better solution to your woes in obtaining a personal loan. You can use the onsite loan calculators to compare rates, and send and receive inquiries and replies from the comfort of your home before you hit the road for better deals (assuming that there are any). In short, the road to securing a personal loan that you can actually use is much smoother because of the sheer range of options available today.