A bad Credit score can be a nightmare for an individual suffering from financial setbacks. In such a case he has only one option for credit left which is direct lenders which too is quite risky. In such a scenario where he has to demand a loan from the direct lenders aka the unorganized sector of the economy. What are the steps one could use to reduce the risk factor? The risk here signifies the dire situation where this sector of the economy is not regulated by the official authorities and an individual as such does not get legal remedies. In such cases introducing the aspect of legal aid, and convincing the lender to involve in such a producer becomes the demand of the situation which is not at all an easy demand to fulfil. Here we will be discussing how one can improve the credit score via loans from direct lenders, alongside will be discussing some precautions to take while applying for loans, so that you do not get trapped by these sharks of the unorganized sectors of the economy.
Many of us are not even aware of the concept of direct lenders, who they are, and what differentiates them from normal lenders. When we enter the credit market for credit services, we often go to banks that are a part of the organized sector, that is they are regulated by the authorities of the state, even the interest to be paid by the loanee should fall under the range decided by the concerned authorities. The other sector includes loans for very bad credit direct lender.
Organized sectors loans are not easy to avail, one needs to fulfil the criteria decided by them among which is the concept of credit score, that is your history have you repaid all the loans within a stipulated time frame, then comes the situation when due to some emergency you failed to maintain the credit score, then enters the concept of loans for very bad credit direct lender. Direct lenders are the lenders who give you a loan without even considering your Credit score but at a higher rate of interest, since they kind of lenders are the art of an unorganized money market, they often change their statement aka the rate of interest which the loanee has to pay. These can be anyone, your friends, families, some known people or unknown ones, who practice such a credit system.
The best way to avoid the trap is to introduce a legal document stating how much amount you demanded and received, don’t forget the interest both parties decided upon and the time frame. Now, these kinds of lenders often demand collateral in case you are not able to repay them. They can access the funds by selling the collateral if your loan is with collateral don’t forget to include that clause in that document. It will save you unnecessary havoc.