How to Get Approved for Cash Advance Even with a Bad Credit – What to KnowJan 30, 2020
It is no surprise that there are a lot of people with bad credit, which greatly affects their borrowing options. Ideally, you can still get approved for a loan or cash advance despite having bad credit—but it can be challenging to get a good one. You have limited options, and rates could be higher. The good thing is, bad credit loans are available for those consumers who have bad credit or low credit scores.
If suddenly you need money to make payments for your medical bills, consolidate credit card debts, or you need a downpayment for a new car but have a credit score that’s too low to get an approval from the bank, do not worry. It is still possible to get a cash advance. Low credit scores make it convenient to fall into expensive and complicated traps, but simple preparations can help you avoid the worst-case scenario.
Getting a Cash Advance with Bad Credit
Getting any form of financial assistance can be difficult with bad credit, especially coming from traditional financial institutions. The good news is you can still get cash advance even with low credit scores. There are various online lenders who are willing to provide you the cash you need for a short period without the need to dig into your credit score. They only need proof of your income to show that you are capable of paying the loan on time. There are things you can do to get approved for cash even with a low credit score:
1. Get a Collateral
In some cases, putting up collateral is one sure way to get a cash advance approval. Collateral is something of value that you own that is given to the lender in exchange for cash. By pledging something valuable, the lender knows that you are serious and will not turn your back from your obligations.
Also, collateral will give a better chance for lenders to collect the loan since they know they can sell your item should you fail to make the payments. Home-equity loans and cash-secured loans are two types of loans that can be approved with collateral.
Even so, be wary when pledging collaterals. You could probably use your equity in your home, but the risks at stake are too high. If you fail your payments, you might be evicted in foreclosure, making the situation a lot worse than expected.
2. Seek a Guarantor
You can increase your chances of getting a loan by having someone who has a good credit score and with better financial standing who can act as your guarantor. The risk is reduced when you have a guarantor who agrees to cover the cost of your loan if you cannot make payments. If you cannot find a guarantor, look for a loan broker who can act as a mediator between you and the lender.
3. Check Out Credit Unions
When you shop around for loans, include credit union in your list of options. Even with bad credit, these institutions may still be willing to work with you. Credit unions are typically smaller than banks, and they have a better community focus. When applying through credit unions, they may personally review your application and discuss the options with you, as opposed to simply using your credit score as references or the other numbers on your application. Since they interact with you on a personal level, they can have a better understanding of what you need. Small, local banks are also another good option since, like credit unions, they have reasonable rates and community focus.
Some people may be responsible for handling money but may still get strapped for cash. Life happens. Unexpected financial issues or emergencies can sneak in, but there is no reason to feel bad and hopeless if you have a low credit score.
If you’re in South Africa and are looking for a bad credit loan, get in touch with us today! We’re happy to help.