When it comes to financing banking and several other institutions, the creditworthiness of individuals matters the most. Therefore, when it comes to the credit score, it is pretty practical and essential for an individual to maintain their behaviour in terms of financial history repayments etc. the individual that has a bad credit score will have various difficulties in acquiring a loan and in some cases he or she might not be eligible to even carry out or issue alone. Therefore, credit score plays a vital role in the financial field.
Eligibility criteria for bad credit loan:
Though it is pretty hard for any individual to attain a personal loan on any kind of loan by having a bad credit score, several banking institutions still provide don’t over specific eligibility to individuals with a bad credit score. To issue a loan with a bad credit score are several criteria. Some of the eligibility criteria that need to be met by an individual who has a bad credit score our:
- The applicant is required to be in the age range of 21 to 57 years.
- The monthly income must be more than the average EMI monthly amount.
- There must be a proper bank statement where the payment has been reimbursed into the applicant’s bank account.
- However, in some instances where the individual is employed, the monthly payment can be in the low range.
Documents required for a bad credit loan:
- The official identification proof is the first and foremost important document for a Bad Credit Loan.
- In some instances, a passport is also required.
- Address proof of the individual.
- Income proof of that particular individual involves the last three months’ reimbursement of the salary in its bank account.
- In the case of being self-employed, the individual must submit their bank statement for the last three months in PDF form.
Fees and charges applicable over lousy credit loans:
When an individual has a Bad Credit Score, it is pretty hard for that individual to issue alone. However, in some instances, they are eligible to take the loan, but they have to pay extra fees and charges to do so. Some of the basic expenses that apply to these individuals are as follows:
- The interest rate will start at 1.33% per month.
- An extra loan processing charge will be ranged from 2 to 8%
- Additional charges will be applicable at every cheque bounce.
- An interest of 2% per month will be relevant over the overdue EMIs.
- Several certainties and issues are guided by the financial institution during the loan cancellation procedure.
In simple terms, an individual with a bad credit score will have a lot of uncertainties while issuing a loan. Therefore, an individual needs to maintain his or her credit worthiness. However, in some instances of emergency, a bad credit loan is an option for these individuals, but they have to suffer several charges, fees and extra hardship. Certain financial institutions provide easy loans to individuals with a back to create a score. Still, they charge an additional amount over the interest and limit the loan amount for those particular individuals.