Not everyone has a great credit score, in fact more and more people have trouble keeping their credit score just as it should be. In a perfect world, we would all have a good credit score or history, and we’d be able to get a loan as and when we needed it.
The trouble is that a lot of people are struggling as it can be hard to make ends meet, and they often take out loans that are hard to pay back, or they miss payments on their current loans.
When your credit score is bad, banks and other financial institutions tend to see you as a risk. Unless they are sure they will get the money back, they won’t lend it to you in the first place. I know this may seem quite harsh, but they do have to be careful.
Imagine if someone asked you to lend them some money, but you weren’t sure if you would ever see it again, how would you feel? Chances are that you may not be too keen to hand over the cash. The money that you’ve worked so hard to earn may end up disappearing into someone else’s pocket, when it could be in yours all the time.
What can you do?
So what can you do? How can you get a loan when you really need one? There are a few solutions that you may want to consider:
- Ask yourself if you really do need a loan, and whether there’s any way you can manage without one.
- If you find that you still need the money and you cannot manage, then perhaps asking friends or family is a good way to get the cash you need. They are unlikely to charge you interest, and arranging payment dates can make them more confident about handing over their cash.
- Try to work a few extra hours. Some people I know have taken on a few more hours at work, and they’ve managed this way. My friend who creates Topiary Art did an extra 5 hours a week, and that helped him to get hold of the much-needed cash.
- Think about selling things you don’t need or want. This is a great way for you to make some extra cash. Although you may not be able to come up with the full amount, you could well find that your bank balance is a little better.
Pay day loans
One thing I don’t want to suggest is taking out a payday loan. The interest rates on them can be phenomenal, and you could end up paying 50% more back. Some people do manage with this type of loan, but a lot of people don’t. My older took out a payday loan, and then had to apply for another as he was unable to make payments on the first loan. This is how things can spiral out of control if you’re not careful.
I think one of the best things you can do is to consider all of your options before you take out a loan. If it looks like you can get away without applying for one, you could save yourself a lot of cash in the long term.