There are times when you need payday loans to get through a financial situation. Taking out a payday loan when you have a bad credit score is possible. We know that trying to acquire a loan with a bad credit can be a challenge, especially when it shows on your credit file. Some lenders can have your loan application under soft search (informal enquiry) which is a better evaluation option because it won’t go on your credit file. Otherwise, this will make your score worst.
Getting approval is not guaranteed. However, there are a few tips you can use for a better chance at bad credit payday loans.
Improve your credit score
Improving your credit score is hard work. A bad credit score can stop you from getting a loan, among others. One of the benefits of having a good credit score is to help you out during emergencies. Here are some tips to better your score and keep it looking good.
- Monitoring — Credit bureaus like Experian can help you monitor by providing your credit report for free. Your credit report can show all your direct debits and the positive or negative factors that contribute to your score. It gives you all the information you need, hence, allows you to make it better. *Note: your credit score differs depending on the credit bureau.
- Consolidation loan — Sometimes, consolidation is good if you have multiple debts. This way, you just have one loan to worry about. The faster the principal could be paid off, the quicker you have to deal with the balance — his helps to boost your credit score. Aside from improving your score, there’s a tax break too. There are companies willing to give you a consolidation loan. They can really help you out with your debts, but keep in mind to only take one out if really necessary.
- Don’t change residence — Changing your residence too much would affect your score negatively because it’d be harder for the lender to track you down. You should stay in the same place for a few months if you plan to make a loan application.
Requirements for Payday Loans
Your latest 3-month bank account statement is a usual requirement. This account is where your salary is directly credited to. If your salary is paid into more than 1 account, you will need to prepare and supply the bank statements separately.
Printouts from online banking may be accepted as long as you can give other supporting details to prove that you are the account holder. The data will help the lender in assessing your payday loan application.
Lenders may also ask for original documents or copies of:
- Payslips
- Utility bills
- Centrelink statements
- Other statement of accounts
- Other loan contracts
- Lease statement showing if your paying your rent on time
Data in your bank account statements, your credit file, and whether you are a first time borrower may indicate the type of documents you will need to submit.
If you already have possible lenders in mind to choose from, make sure to call them up and make enquiries to assess the right one for you.
Find the right lender for your bad credit payday loan
Nowadays, there are many specialist lenders to choose from. You may not know where to look first, but it’s very important to do your research and find the right one that suits your financial situation. Here are the following things to consider:
- Do some research — Make sure your specialist lender have a good reputation and dependable because they can access your bank account details and other personal information. Go to the lender’s website to learn about the terms and policies. Do not hesitate to make enquiries on important details.
- Consider rates and fees — Expect to have higher interest rates and fees included in the loan with faster access to funds and special features from non-traditional lenders. They can charge up to 24% (monthly fee) of the principal loan amount for a loan less than $2,000, as monitored by The Australian Securities and Investments Commission (ASIC).
- Loan extensions — Some specialist lenders can extend your loan term up to 90 days, which may include extra fees. Make sure to enquire about details in the event of a default. Ask about hidden and other extra fees you may need to pay in your loan terms. Try to avoid any extensions if you want to pay off your loan quickly.
- Turnaround time — It is wise to look for a lender that can make fast decision and credit the funds directly to your account within a day. Cigno Loans offers products that won’t make you wait for days or weeks. Apply here.
The money from payday loans can be directly credited into your account on the same day. If you’ve made your decision and you want to acquire a bad credit payday loan, make sure to check first before signing the agreement. Learn about the loan terms and what happens when you default.
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Although lenders can tailor-made it’s services for you, it is better to only get a loan if you are confident that you will make the repayments on time. Use a loan calculator to ensure that you don’t get a loan you cannot afford. Set the loan amount and term to have an idea of how much you are going to repay. Most lenders have their own calculator on their websites.
Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.