Although lenders are more comfortable offering loans to people with good credit scores, they still have loan options for people with bad credit. In fact, some lenders are glad offering loans to people with poor credit scores.
Now lenders do not deny you credit based on your bad credit score. They only look at your ability to pay the loan. If you have a steady source of income, there is a likelihood that you can access a short term loan.
Short-term loans have terms that range from a few months to five years.
Bad credit personal loans are loans that are offered for people with poor credit scores usually lower than 580. People with this kind of credit score are often denied credit by traditional banks.
However, online lenders often look at other factors such as income when offering loans to borrowers with poor credit. They do not even consider your credit score although they will run a soft credit inquiry on your account to confirm all that you are saying.
There are several types of bad credit personal loans. They include the following
Payday loans are short-term loans that should be paid by the next payday. The APRs on these loans are high. You do not need collateral to apply for this loan.
This loan allows you to use the title of your vehicle to access a fast loan. The interest rates on this type of loan are high and unfortunately, you may lose your vehicle if you do not pay the loan on time.
With installment loans, you can get a huge some and then repay over a period. The amount will be divided into equal parts and you will make monthly payments until you have completely paid the debt.
With a cash advance, you will be able to withdraw cash from the ATM using your credit card. This cash can be used to sort out your short term needs. The rate charged on credit card cash advances differ from the rate you will be required to pay credit card purchases. You should pay cash advances on time so that you do not accumulate more debt.
You may be required to get this type of loan if you need to rebuild your credit. It is often offered by banks and credit unions. This loan comes with low rates and you can get cash as low as $100.
Although lenders vary, the information required by these lenders are similar. The loan application process is also similar. When you submit the loan request by filling out the loan request form, the lender will review your application and then they will approve or disapprove your loan.
Details that are required on your loan application form include your name, date of birth, social security details, employment details, tax returns, and bank statements. When they approve your loan, you will need to sign the contract and then the cash will be deposited in your account.
When you are applying for this type of loan, you will need to meet the following requirements.
Sometimes, you may not be able to apply for a loan because you do not have a valuable property to provide. In some cases, people do not apply because they do not want to risk losing their properties. Fortunately, these loans are usually unsecured loans and you can apply without a collateral.
The entire process is fast. You do not need to wait for a long time to get access to the loan. The lender will review your application quickly and tell you if you qualify or not. You are likely to receive the lender’s lending decision on the same day. Once that happens, the lender can also decide to offer you the loan by the next business day.
The lender does not restrict you on what you can use the loan for. You can decide to use it for anything you want. You can use it to consolidate your loan or even pay bills.
When you get access to this loan, it is important that you manage your loan well so that you are able to repay the loan and also maintain a good credit score. it is important that you pay your payday loan on time. You can only do that if you plan your payments. Most people draw and include the loan in their budget. You should also keep track of the loan due dates and pay before that time.
It is important that you do not spend all your loan on personal upkeep. For instance, some borrowers borrow huge sums of money to go and do grocery shopping. If you use your loan for purposes that do not allow you to earn anything in return, you may have difficulty in repaying the loan.
When you want to get this loan, it is also important to compare several options so that you can choose the offer that will best meet your demand. You are likely to get an offer that has a low interest rate and fees if compare options.