You can get a personal loan, even with bad credit

Applying for a personal loan can be a daunting process, even if you meet all the criteria and have a clean credit record.

But for those who are looking to apply for a successful personal loan with bad credit, this can become an even harder process.

You may be wondering how to apply for a personal loan online if you have bad credit, thankfully this is an easy question to answer as it is a similar process to applying online with good credit.

How to apply online for a personal loanor their loan applicants to meet, which include the following:

• A regular monthly income of R5000 or more

• Three months payslips or bank statements

• A clear copy of your identification document

• Bank account details into which your salary is paid

• A recent document confirming your residential address (no older than three months)

After these documents have been provided, you can fill in the online forms on the bank’s website and submit the form and documents for approval. It is truly a simple process that can save you a lot of back and forth on phone calls, as well as save you from having to go into the bank in person and deal with queues.

Many banks do ask for a clear credit record, but if you have bad credit, you can still apply for a personal loan. While it may be difficult, there are some steps you can take to help the process along.

Order a credit report and check for any errors

Before applying to any bank or lender, it is important to order a credit report in order to thoroughly check through it for any errors and discrepancies. Your credit report is used to calculate your credit score, so it is highly important to ensure that this is accurate and fair.

If you find any errors on the report, you will need to dispute and/or rectify these through the correct channels. You can also contact the credit bureau, providing this information as proof that they have incorrect data on your finances and debt rating.

Know your position

If you have received a bad credit rating, it is vital to know that you most likely will be unable to secure a favourable deal with attractive interest. You should try to focus on solutions which are useful and affordable, allowing you to pay back your debt quickly and comfortably.

One manner of doing so is to opt out of an unsecured loan, as these credit products usually have higher interest rates. If you are able to place an asset as collateral, then you may be able to get a secured loan with a lower interest rate.

Assess the risk carefully

If you fail to repay the loan, then you will lose the asset you placed as collateral. This can have a negative impact on your daily life and on your career, as if you placed your car as collateral, then you will lose your daily transport.

If you are unable to work or earn money due to losing the asset, then this will certainly have a significant negative effect on your ability to repay the loan. You will also need to ensure that the lender you are utilising adheres to the responsible lending policy.

Try borrowing with a co-signer

If you have figured out the process of how to apply for a personal loan online, but have been unsuccessful due to bad credit, then you can try to borrow with a co-signer. A co-signer is someone who takes on the responsibility of paying back the loan with you, which also puts them at risk.

The co-signer needs to have a good credit history and a low debt-to-income ratio in order for them to be allowed to help with the repayments. It is vital to take into account the fact that the co-signer will also be putting themselves in debt in order to help relieve your debt.

Specially designed loans can help

If you have tried over and over to apply for a personal loan online with certain banks and financial providers, then it may be time to move on to a more specialised loan provider.

There are some companies in South Africa which specialise in offering personal loans to people with bad credit, but it is vital to ensure that they are registered with the National Credit Regulator (NCR), which means that they are compliant with the laws regulating credit providers and that they satisfy the government’s trade requirements.

Applying for a personal loan online, or in person, with bad credit does not have to be an impossibly hard task. You do not have to be afraid of rejection if you go into the process well-prepared and with the correct expectations.