Low Credit Loans

A low credit score can make it harder a person to get loans from traditional lenders such as banks. Fortunately there are many alternative lenders which are willing to lend money to people with low credit scores.

Many lenders will be willing to make loans to persons with low credit scores if those people are willing to pay higher interest rates. Some lenders will impose stricter terms or other limits on loans made to people with low credit scores.

Why lenders are willing to loan to people with low credit

Having low credit simply means that a person has been given a low credit score by the three big credit bureaus that compile credit scores for US residents. Credit scores are based upon a person’s record of paying back debts such as credit cards.

A person with a lot of money can have a low credit score if they have a record of not paying back loans or late payments. An individual with no money can have a high credit score if they have no history of not paying loans.

How low credit scores can affect loans

Lenders base their loan decisions upon the risk or potential they take in loaning money. A credit score is an indication of risk, a higher credit score means less risk while a lower credit score more risk.

This means that lenders will be more likely to turn down loans to people with low credit. Lenders may also alleviate the risk by charging higher interest or imposing stricter terms on such a loan.

Low credit lenders

A lot of lenders are willing to loan money to people who have low credit scores. Many lenders like making loans to such people because they can charge higher interest rates and stricter terms.

A good place to find such lenders is online, typing the term low credit loan or low credit lender into a search engine can produce a list of such lenders. When looking for such a loan a person should pay careful attention to the terms of the loan and the fine print on the website.

Your income can help you get a loan

Many lenders will be willing to ignore a low credit score if a person can demonstrate that they have a good source of income. A person with a good job or a business might be able to get a lender to ignore a low credit score; especially if the borrower is willing to make a down payment, or make higher payments.

 A lender may ask a person to prove that they have the income available. For example, they might ask to see pay stubs or banking records.