Microloans with Bad Credit
Bad Credit Microloans
Having bad credit means being rejected for loans and if you manage to secure a loan, you are likely to pay very high rates which can be demoralizing especially when borrowing to start a business.
Microloans have given individuals with poor credit an avenue to redeem themselves, as the micro lenders do not rely on credit ratings compared to the banks and other financial institutions.
MICROLOAN WITH BAD CREDIT HAS ITS PROS AND CONS
Pros of Bad Credit Microloans
Re-establishing credibility: Getting a microloan with bad credit is a great way to start rebuilding your credit. Borrowing and repaying the microloans, will improve your credit rating as micro lenders report your progress to credit bureaus. With utter discipline and patience, you will be able to reclaim an excellent credit rating which could give you access to bigger loans.
Fair rates: unlike the banks and other lenders, the microloan providers do not charge unreasonably high-interest rates to clients with bad credit.
Free training for a start-up business: most microloan providers have training requirements which you must meet before obtaining a microloan.
Cons of Bad Credit Micro Loans
Limited funds: a person with bad credit is risky, even for micro lenders; for this reason, you are likely to be given small amounts of cash as the first loan.
Defaulting: in case you are unable to repay the loan, your credit rating will fall from bad to worse; which will affect you negatively in future.
Micro Loans with Bad Credit
How to Increase your Chances of Getting a Microloan with Bad Credit
Personal references: having a personal reference will give the micro lender confidence to loan you cash; as they have someone to follow up with, in case you forfeit the loan.
Collateral: having an asset to put up as security against a loan will enable you to secure more funds depending on the value of your collateral.