If you need a quick loan, you must prepare all the relevant documents. This is difficult especially for young borrowers who have limited credit or no credit records. In addition, you may have to meet many criteria in order to be qualified for a loan. In some cases, you do not have any supporting document to prove your income. For example if you are a self-employed person.
If you do not have any supporting document to prove your income, there is no credit score. When you apply for any loan, whether it is car, mortgage or personal loan, it is likely that you will be rejected by the bank.
Under qualified loans being granted are occasionally known as subprime loans. This is because the candidates seeking these loans are under qualified, less than ideal, or high risk borrowers, making them “subprime” or under qualified to obtain a loan in the amount they seek (or even obtain a loan at all).
In finance terms, subprime (sometimes called second chance lending) means making loans to those who cannot make a schedule to repay the loans. High-risk borrowers are like divorce, medical emergencies or unemployment & etc. They cannot provide enough supporting documents to prove their income. This also means that there is no supporting document to prove that they have the ability to repay the loan.
Although poor credit score does not always reflect your current circumstances or ability to make timely payments, poor credit rating or lack of documentation means that you will be rejected by bank when you apply for loan. If you cannot get a loan from bank, how should you build your credit and let the bank have confidence with you? The answer is to go through a different lender – a person who has no affiliated with bank that knows we need a second chance. You can apply for an under qualified loan from a lender that takes greater credit risks, like us.
When you take this type of loan, the interest is usually higher because you are lacking of credit score or qualification as the creditor assumes greater risk when making a loan to you. However, if you need an emergency loan or need to re-establish your credit score, under qualified loan will be the right choice for you.