Anybody can have a bad credit rating for one reason or another. A simple error on your credit report may lower your score significantly. On the other hand, forgetting to pay a utility bill on time or making a late car payment can taint your credit rating. It is important to note that bad credit does not necessarily indicate financial incompetence. Fortunately, most lenders know this and they have removed some of the restrictions that prevented consumers who have a low credit score from accessing their credit facilities. If you need a 3000 dollar loan and you have a low credit score, you should know that you can still qualify for a loan.
How to Qualify for a 3000 Dollar Loan with Bad Credit
Obviously, a poor credit rating will make you less appealing to lenders. After all, chances are high that you will default as you did in the past. The following are some things you will need to provide lenders to secure a 3000 dollar loan:
i) Proof of Income
Lenders may not say it but they do not care whether you have a good or bad credit history provided you have a stable job. All you need to do to get a lender interested in lending you the money, you need is show proof of income. The money can be from employment, self employment, pension or business income among other types of incomes.
ii) Back the Loan with Security
A secured loan is less risky to the lender because it is backed with collateral. If you default, the lender will simply repossess the asset used as security. It is important to note that most lenders cannot lend more than 70% of the current market value of the security. For instance, a car valued at $5,000 will only qualify you for a secured loan of up to $3,500, which may be enough if you are looking for a 3000 dollar loan. You will have to surrender the car’s title to the lender and pay premiums for auto insurance for the duration of the loan, in case the asset is stolen or damaged. You will not be able to sell the car or borrow another loan against the car until you clear the loan. Another option is to cash in on some of the equity you have on your home to get a 3000 dollar loan.
iii) Pay a Higher Interest Rate
Bad credit borrowers often have to pay a higher rate of interest compared to borrowers who have a clean credit history. The difference in interest rates can be several digits, but the cost is acceptable considering you have a poor credit history.
iv) Get a Co-Borrower
Some lenders can advance loans to any adult who has a reliable income source regardless of their credit rating provided a co-borrower with a high credit score agrees to cosign the loan. This may be inconvenient but it can get your 3000 dollar loan application approved quickly.
While you can always turn to your bank for all your credit needs, there are also credit unions and private lending firms that can provide you with better loans. The terms and conditions that come with the 3000 dollar loan are what matter most.