March 31, 2018

Getting a personal loan of any size when a low credit score hangs over your head can be difficult, especially when approaching a traditional lending institution. But it is worth noting that securing even a $5,000 personal loan for bad credit is not impossible. Simply by taking alternative routes, the necessary cash can be secured.

It might seem illogical that a personal loan of several thousand dollars can be approved when a low credit score suggests repayments cannot be guaranteed. But the fact is that a credit score is not considered the basis on which to reject a loan application. This is because a variety of things, like losing a job, can affect the most honest of borrowers.

Anyway, getting approval for $5,000 loans is not a simple matter of giving the thumbs up. There is criteria that needs to be met and, as such, an application needs to be in proper order if it is to succeed. Still, the route chosen is telling, and there are three alternatives to traditional banks that a borrower can take.

Online Bad Credit Specialists

The internet is filled with lenders that specialize in loan products designed for people with low credit scores, so a $5,000 personal loan for bad credit applicants can be accommodated. There are some points that need to be taken into account, but in general this route is considered superior to traditional lenders anyway.

The first point is that the interest rate charged is higher than for those with a good credit rating, but it is still less than most banks will charge. For that reason, the online lender is regarded a very competitive option, especially given the fact that approval on a personal loan is more likely.

However, that is not to say that all applications are approved. In fact, the concentration on income means that it is essential an applicant for a $5,000 loan can prove they have a regular source of income, and has been working full time for at least a period of 6 months.

Payday Loans

When bad credit is an issue then seeking a loan that requires no credit check for approval is a good solution. To this end, a payday loan (or cash advance loan) is ideal. A $5,000 personal loan for bad credit is typically too large to get approval for, however.

Payday loans are small, ranging from $100 to $1,500 because they are issued against a forthcoming paycheck. For this reason, the sum available to borrow is strictly controlled. It also means that in order to get the correct personal loan sum it may be necessary to take out a series of payday loans – perhaps 4 x $1,250.

But remember that repayment is also very short term, usually within 1 month. So, your paycheck would need to be able to cover the total sum borrowed. Although, it may be possible to negotiate a 4-5 month deal in order to secure one $5,000 loan.

Loan Bidding

A final possibility is the …

For the average working adult, going back to school can be one of the largest investments he will make in his life. But if you have some time before you pursue your studies, instead of applying for a bank loan, why not let time and capital work for you. Even if you plan to pursue a bachelor degree in the near future, say, in three years more, you can still save for it.

First of all, you need to have a target amount. Usually, the course fees represent a large portion of the cost. Other costs are examination fees and living expenses for those who come from other towns.

Some students may choose to study full time so that they can focus on their studies. In this case, if your employer doesn’t give you paid time off to do your studies, your budget will increase significantly, as you now have to account for your entire living expenses. In addition to that, you’ll still have to continue paying for things like insurance, car, mortgage, credit card as well as utility bills.

However, expenses can be higher if the course is done part time, as the person has less time to devote to his studies. As a result, he may have to prolong the program or even have to re-sit some papers, which means additional examination fees.

How much time you have to put aside the money depends on when you plan on taking up the program. When is the ideal time to start? To get more out of a bachelor degree, it would be good to have real world working experience of two to three years, on which to reflect upon when you’re doing the units.

At least three years of working experience would be good but you shouldn’t wait too long as the motivation level will drop. Even if you commence your studies in three years, you don’t have to pay the money in one lump sum. You can save through the study period as well which, gives you more time to accumulate funds.

Many education centers and colleges have worked out interest free schemes that you can use to your benefit. You can let your money work for you while you use the interest free payment option.

There is also an option for students to pay their fees in the monthly payments over the period of study and if the amount is paid in a lump sum, students are given a rebate. Another option is a scheme in collaboration with a bank, where students pay few hundred dollars at the start of the program and nothing else for two years. Thereafter, they have the option to repay in installments upon completing their studies.

Finally, you need to work backwards; given the number of years, inflation rate and a projected rate of return to come up with how much you need to put aside regularly. However, inflation may not have a large impact if your study period is short.

Once …