Unsecured Loans for Bad Credit Scores

Unsecured Loans for Bad Credit Scores

Your bad credit score may stress you out a lot, especially when you need a loan and lenders keep denying you credit because of your bad credit. Maybe you are not looking for the loan at the right place. If you apply for a loan from a traditional lender with your poor credit score, you may not get the loan since traditional lenders offer loans to people with good credit scores only.

The good news is that you can get an unsecured loan even with your bad credit if you search the right place. There are several online lenders who offer unsecured loans for people with bad credit scores.

Unsecured loans are loans that depend on your creditworthiness alone. You do not need to provide collateral to secure the loan. There is less risk in getting an unsecured loan since you do not risk losing your property.

Although it is not easy to get unsecured loans for bad credit since they are risky to the lender, there are still several options for people who need them. These loans have flexible requirements and you can the loan quickly.

Do You Have a Bad Credit Score?

Here is how to get an unsecured loan despite your bad credit score.

Look for lenders who have low lending requirements. Some of them will pre-approve your loan without hurting your credit score. You should check the amount the lender is willing to offer you. You should also check the rate and the fees the lender charges. You can then compare them and then choose a lender whose loan package meets your demands.

The next thing to do is to complete the application form. The lender will request for your personal details such as your name, date of birth, your social security details, your employment details, and your contact information. You will also be asked to provide a steady source of income.

You should be at least 18 years old and you should be a citizen of the United States. Once you submit your application, the lender will review it and then approve or disapprove your loan. The lender will also look at your credit score.

If the lender is satisfied with everything, you will be asked to sign the loan contract and then the cash will be sent to your account.

Types of Unsecured Bad Credit Loans

If you want to get an unsecured loan, it is a great idea to know the several loan options so that you can choose the one that meets your demands.

  1.    Payday Loans

Payday loans are short-term loans that should be repaid with 2 to 4 weeks. This loan is designed for workers who need cash but cannot wait for the next payday. This loan is meant to take care of short-term needs. This loan is flexible and it is easy for you to qualify for the loan. The application process is easy and simple. Most of the payday loans are applied online.

  1.    A line of Credit

A line of credit allows you to get approved for a pool of funds. You may not need the cash immediately but it will be available for you to use whenever you are ready for it. A line of credit is revolving and whenever you pay back the one you withdrew, the amount available for you increases.

  1.    Debt Consolidation Loans

You can also get a loan to consolidate your loan. When you have several high interest rate loans you can use this loan to combine them into one loan. Sometimes, you may be struggling to keep track of the due dates of several loans, you may also have problems paying them because the total monthly payment for these loans is extremely high. When you consolidate your loan, you can make manageable payments at the end of the month.

  1.    Cash Advance

This is another option when it comes to unsecured loans. you can use your credit card to withdraw cash at the ATM. When you apply and the lender approves, all you need to do is visit the ATM and you can get access to the cash. You should note that the rate charged on credit card cash advances are different from the rates charged on credit card purchases. With cash advances, you incur more debt when you do not pay the loan on time.

Factors to Consider When Applying for an Unsecured Loan

  1.    Fees and Interest Rates

The fees and the interest rate charged on loans have a significant effect on the cost of the loan. higher interest rates mean that you will pay more for the loan. Some lenders do not charge certain fees and some lenders also charge low rates. It is important that you compare rates to know the best option for you. You should, however, note that the rates on unsecured loans are generally high.

  1.    The lender

It is now quite difficult to identify legitimate from scam lenders. It is easy to find unsecured loans for bad credit score but some of them are scams. The supposed lenders end up taking money from the borrowers. You should check if you are dealing with a reputable lender. You can check this by looking out for the following.

You should check for an accreditation by the Better Business Bureau. You will find their BBB sign on the website if the lender is accredited. If the lender requests for cash upfront before even processing your loan, you should desist from working with the lender.

Lenders genuine lenders will add the fees and rates to the total loan amount. You should also check the reviews about the lender from other reputable review websites.

Features of an Unsecured Bad Credit Loan

  1.    Online application

You can easily apply for this loan online. The entire process is online and there is mostly no paperwork. The process is simple because the application form is simple and the requirements are flexible. You can complete the application in less than 10 minutes.

  1.    Fast access to funds

You can get access to the funds quickly. Once the lender reviews your application and the confirm all the information you have submitted, they will approve the loan. They will then request that you sign the loan form and then the cash will be disbursed to your account. Some lenders can even make the cash ready on the same day of application. You may even get the cash within a few hours if you already have a relationship with the lender.

  1.    Favorable repayment schedule

The lender will schedule your loan repayments in a way that will help you comfortably repay the loan.