It may seem over dramatic but a growing number of people are now considered high risk borrowers due to their very low credit scores. It might seem that such a status would rule them out of any chance of getting loans, but in fact there are high risk personal loans available.
The reason for such opportunities really lies in the open-mindedness that some lenders have, knowing as they do that low credit scores do not necessarily mean untrustworthy borrowers. That it is possible to get approval with low credit scores means vital funds are always within reach.
But there are conditions to be wary of. High risk also means high interest, but the extra expense of these personal loans can be worth it when a financial emergency is dealt with as a result.
What Is High Risk Loan?
The very term high risk might come as a surprise. After all, even bad credit borrowers will not see themselves as a source of financial danger. But when a credit score is very low – such as less than 580 – lenders feel their applications are for high risk personal loans.
These loans are typically for small sums of money, normally little more than $1,000 but on occasion growing to as much as $5,000. And since approval with poor credit scores is not such a strange thing anymore, there is every chance of getting $3,000 with terrible credit scores.
Of course, applicants really only seek this personal loan option when the need for cash is acute, and the time to find it is very short. So these kinds of loans are ideal for dealing with financial emergencies.
Qualifying for a High Risk Loan
With so many people affected by financial emergencies, the need for fast access loans is pretty acute. Arguably the best known option is the payday loan, but a high risk personal loan is worth considering too.
There is a difference between the two, with a limit of $1,500 on the payday loan. However, the high risk option can be for a higher sum and can be approved as quickly as in a few hours. The chances of getting approval with poor credit scores may be normal for both, but when a sum of $3,000 is needed, then high risk loan is ideal.
Qualifying for a personal loan like this really only comes down to providing proof of income, and an ability to repay directly from your next paycheck. Once that is confirms, approval is almost guaranteed and credit scores are ignored completely.
Starting The Application Process
It is not difficult to begin the application process for a high risk personal loan. It is a simple matter of guaranteeing repayments that leads to an approval. And there are two ways of accomplishing this. First, provide post-dated checks so the lender is free to take the payment on a certain date each month.
Alternatively, the repayments can be transferred automatically from the bank account on a given day. This means the lender needs to be supplied with the ABA routing number, and permission for the lender to withdraw the money on the date indicated in your lending agreement.
Once approval with poor credit scores is received, keep on top of the due repayment dates. Then, as the date approaches, each post dated check is redeemed. The whole system is simple, leaving those who may qualify for this type of personal loan with a clear route to vital funds.