Getting Approved For a Bad Credit Loan - Everything You Need to Know


What is a loan?

It is a transaction entered into between two entities, a borrower and a lender, wherein the borrower is the one who applies and upon approval gets a certain amount of cash. This with the written promise of returning said cash together with interest in an agreed period of time. A lender, on the other hand, is the person or entity that allows his money to be used by the borrower for a period of time, and gets it back with profit from the interest paid.

What is bad credit?

Bad credit means that a borrower has not been paying his monthly dues or has been remiss in paying back his loan. It reflects in the records of the loan companies. Even financial records such as past due utility bills and credit card bills can be accessed. This is entered in the credit history of an individual and lowers down his credit rating. Hence, the person now has a history of bad credit. This makes it hard to secure a loan, or get approved for a loan. However, there are ways of getting approved for a bad credit loan. For instance, one can now get a fast loan with bad credit.

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What is a fast loan?

A fast loan is a loan that one can get within 24 hours or less. It is a short term loan that one pays for in the next payday. A fast loan is an alternative source of finance in the event of monetary emergencies involving small amounts of cash.

Why is it possible to get a fast loan with bad credit?

Some credit companies allow borrowers with bad credit to get this type of loan because the principal amount, or the amount to be loaned out, is just a minimal amount. In fact, it is less than the amount in the borrower's next paycheck.

Moreover, in order to balance out the inherent risk for the lender in such a transaction, the interest rate is quite high. Although in practical terms it is quite possible for the borrower to pay out both the interest and the principal with his next paycheck, when calculated in terms of percent, percentage wise the interest would be quite high.

Due to the fact that it is a fast loan, less time is spent for processing and cross checking a borrower's credit history. Credit ratings are less an issue for lenders than a paycheck stub and a postdated check.

How do you go about getting a fast loan with bad credit?

You can go to a brick and mortar credit company, or you can apply online. Either way, application forms must be filled up. Once there you must give these details:
o Proof of employment
o Proof that you are above 18 years old
o Other personal information such as contact details
o Bank account details
o Debit card details

Some online credit companies need you to have a bank account for depositing the amount you have borrowed. As soon as your loan is processed and approved, the money will be deposited in your account. The process could take less than 24 hours. The debit card is for the loan payment. On the due date, the agreed amount of principal and interest will be taken out of the debit card.


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