A loan is a mode of finance wherein a bank gives a certain amount of money to the customer. They then need to pay it in monthly installments, which is a fixed amount. Most people use it to pay out existing debts.
But, if your credit score is very low, then the bank might hesitate to give you a loan. Still, there are Guaranteed loans for bad credit available, that you can apply for. We are going to discuss this further in our article.
How does credit score determine your eligibility?
You might get a question, how bank decides whether to pass or deny the loan based on credit score?
A bad credit loans shows the transaction pattern of the customer. That includes existing debts, payment of debts, and records.
From 300 to 850 is the range of the credit score. A good score is ranged between 600 to 750.
If your credit score is less there might be a problem in getting a loan or a credit card. This is due to the security policy of the banks and companies.
Could I be eligible for a loan if I have a low credit score?
The answer is yes, you can get a loan that is issued by some verified private companies. You can avail of a guaranteed loan for bad credit from them.
They provide the loan on the basis that you can pay your installments on time even if your credit score is less. So, do not worry and apply.