In today’s rough credit markets getting low credit score loans is extremely difficult. In fact, in many areas it may be next to impossible to find a bank or credit union that is willing to extend credit to potential customers with less than perfect credit, further limiting the options of those looking for low credit score loans.
In past years, banks and credit unions would be willing to work with people looking for low credit score loans as they had a lot of liquidity on hand. With the economic downturn of 2008 and the collapse of many banking institutions, things changed. The credit markets went into a deep freeze and trying to get any kind of loan, much less a low credit score loans, became extremely difficult. While times have improved for banks and credit unions, they still remain extremely cautious.
As a result, getting low credit score loans will require a lot of effort put forth by the potential customer. If they can find a bank or credit union willing to work with them, they will find the terms of the loan agreement a lot tougher than they were two or three years ago. The interest rates will be significantly higher, the length of the loan may be less and there will probably be a significant requirement of collateral for large-scale loans. Because they are now highly adverse to risk, lenders look at giving loans to those with a low credit score as something to be avoided unless they can receive something worth their while in return. In many cases, the only way someone can get a low credit score loans is if they have an established and successful relationship with a bank.
Many individuals looking for low credit score loans don’t have such a relationship to fall back and have to look for loans elsewhere. This takes them to short-term loan businesses, who will give out loans to nearly any customer, but require the loans to be repaid quickly at extremely high interest rates.