What does Bad Credit mean?
Bad credit loans cover a wide range of issues that would normally disqualify you from many banks. These range from:
- Arrears on loan repayments
- Credit defaults listed on your credit file
- ATO debt
If you fall under one of these categories, chances are you will be finding it tough to get your bank to help you out.
The sad part is, most of the cases we see are caused by tragic events and all is required is some short term help to get you out of the hole.
Are these loans expensive?
Given that in most instances, you would be disqualified by the major and smaller banks, the lending institutions that offer assistance in this field will charge higher interest rates. However they will then compensate that by offering longer loan terms to help reduce the overall repayment.
Bad credit loans should be seen as a short term solution only. The goal is to get you out of the jam you’re in, pay the loan for a short period of time (depending on circumstances) and refinance you back to a major lender at a normal interest rate.
Are there Low Doc options for bad credit loans?
Yes, most lenders who offer solutions to bad credit customers will not only offer a low doc option, but also allow you to pay out any outstanding tax debt, even if it’s business related.
As previously mentioned, these loans carry a higher rate of interest but can also be cheaper than maxing out credit cards or applying for personal loans or even attempting to find private funding.
Providing you see these lending solutions as a short to medium term fix with the vision of one day refinancing back to a more conventional lender at a better rate, they can serve a very handy service.