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Can You Get A Private Loan With Bad Credit?

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Private loans can be a complicated topic. It can be hard to know if you will be able to qualify for one, let alone what documents you will need to apply. Add in the pressure of having a good credit score, and it can be easy to become overwhelmed. But just how important is having a good credit score when looking to apply for a private loan? We have the answer to that question and more in the article below. 

What Is Private Funding?

Private lending is funding that is given to either a company or an individual that have access to private funds. Private funding differs from traditional bank lending in that there are often non-traditional qualifying guidelines. You may turn to private lending if you are finding it difficult to receive finance from a bank.

There are many benefits to choosing a loan through a private lender. Generally, private lenders are able to provide much more competitive rates than lenders such as banks can. In some cases, lending criteria with private lenders are less rigid. So, if your credit rating isn’t the best, a private lender might be able to give you a better loan than a bank traditionally could.

There are many things that a private loan can be used for once you have been approved. These can include purchasing or building a house, urgent funding, purchasing a business or refinancing a mortgage.

Is Good Credit Necessary For Private Funding?

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If you do have a below-average credit history, and you have been rejected by the banks, you may find that a private lender will do business with you. One of the main benefits of a private loan is that your credit rating may not matter as much to a private lender as it would to a bank.

It is possible get a loan with bad credit. However, the thing is that your lender may not be overly keen on giving you a low interest rate. Loans such as bad credit loans, bridging loans or caveat loans may work for someone with a bad credit score, depending on your lender and their application process.

There are four main types of private loans that you could be eligible for, regardless of a bad credit score.

Types Of Private Loans

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  • Bridging loans – These are short term loans that are taken out in order to buy a new home before selling an existing property. These are interest only loans that are repaid after the sale of the original property.
  • Caveat loans – A caveat loan is a short term loan option that allows fast access to funding when secured against additional property owned by the developer. Caveat loans can be the fastest to both apply for and settle. Only a viable option for the short term, caveat loans are generally only for a few months. The private lender decides how you will repay the funds before approving your loan.
  • Bad credit loans – Are loans which usually applied for by borrowers who have a bad credit history. Bad credit can be caused by a variety of factors, including overdue bills or defaulting on a previous loan payment. By having a poor credit history, lenders are usually reluctant to take a chance on you and may perceive you as a high risk. These loans are usually short term and fixed-rate, giving the borrower an opportunity to repair their credit history.
  • Second mortgages – These are for when a borrower has already taken out the first mortgage on their existing property, before deciding to take out a second loan against their property. With a second mortgage loan, the first mortgage must be repaid before it is possible to repay the second.

The Benefits Of A Private Loan

  • A quicker settlement – If you happen to be in need of a loan quickly, the approval process for private lending is usually faster, and can involve less paperwork than getting a loan through a bank.
  • Specialised loans – Private lenders are often able to cater to those who need a wider range of loans, while also having more lenient rules in comparison to traditional methods of funding. This could be ideal for those seeking short term finance.
  • Credit history – Having a good credit history may not be necessary in order to gain approval from a private lender. Many people seeking finance have previously been rejected by banks for having a lower credit score.
  • Easy approval: If you cannot prove your income via the traditional application process that is used by banks, a private lender may be able to offer you an easier way.

Where Does Tiger Finance Come In?

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Tiger Finance makes getting a loan simple. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

We have helped countless Australians with both good and bad credit ratings to be approved for funding. We understand that lending criteria from other lenders are too strict and can stop you from achieving your goals. That is wrong, and it should not hold you back.

How We Can Help

Our finance specialists can help you find the right loan for your project. Private lending is a complicated topic, but we will find a loan that makes your dream project that much easier.

If you are one of the many Australians finding getting a loan difficult, Tiger Finance can make the process simple and pain-free. Give us a call today to get started on your private loan. 

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National Home Loans Group Pty Ltd trading as Tiger Finance | ABN  57 168 971 346 

Tiger Finance Credit Representative: Kiara Patricia Halley | Credit Licence: 468465 

*Interest Rates: Conditions, fees and charges apply. Interest rates are subject to change and will vary. We cannot guarantee that the interest rate advertised on our website will be the one offered to you. Interest rates offered will be dependant on your situation.

*Consolidating high-interest personal loans and credit cards into a lower-interest home loan may result in significant savings on interest for some consumers. However, this solution may not be suitable or accessible to everyone.

*The approval timeframe is varied. Approval time is subject to change depending on your circumstances or loan type. Processing times may be subject to your lender.