- 1 need loan bad credit
- 1.1 Personal Loans For People With Bad Credit Or No Credit
- 1.2 Personal Loans For People With Bad Credit Or No Credit
- 1.3 Q3: Can taking out a loan improve my credit score?
- 1.4 Q4: Will applying for a loan effect my credit score?
- 1.5 Q1: What do I need to get approved for a loan?
- 1.6 Q2: How long does it take to get a loan?
- 1.7 Q3: Can I get a top up on my loan?
- 1.8 Q4: Is Everyday Loans a direct lender?
- 1.9 Bad Credit Loans We Can Help When Others Can't
- 1.10 Learn More Your Place For More Info
- 1.11 Resources News & Legal Documents
- 1.12 Scam Alert Stay Informed, Stay Safe
- 1.13 Getting Personal With Bad Credit Loans
- 1.14 APR – Representative Range Explanation
- 1.15 Important Implications to Consider
- 1.16 Bad Credit Loans Copyright © 2018 BadCreditLoans.com. All Rights Reserved.
- 1.17 Online personal loans for people with bad credit.
- 1.18 Loans for Bad Credit FICO Score Range
- 1.19 Even People with Bad Credit Have Options
- 1.20 Ratings of Types of Loans for Bad Credit
- 1.21 Are Bad Credit Loans safe or dangerous?
- 1.22 Dealing with the Risk in Bad Credit Loans
- 1.23 Loans for Any Reason You May Need!
- 1.24 What Kind of Interest Rate to Expect
need loan bad credit
Personal Loans For People With Bad Credit Or No Credit
Bad credit or no credit makes it tough – but not impossible – to get a loan. Credit unions, home equity and peer-to-peer loans or even debt consolidation with no loan could improve your credit rating and increase your future options.
Personal Loans For People With Bad Credit Or No Credit
You may have seen it on a sign somewhere or possibly on your TV or computer screen: “No credit, no problem!” Don’t believe it. The truth is, when you need to get a personal loan and you have no credit or bad credit, there definitely is a problem. It’s not an insurmountable one, but it is a problem nonetheless.
Having poor credit makes you a high-risk customer to major banks, credit unions and other major lending institutions. Those lenders have strict standards, and they rely on credit scores when picking their borrowers and calculating loan terms. Unless lenders are assured that their loans will be repaid, they simply won’t make the loan. In addition, heightened regulations and tighter internal controls by lenders in the wake of the Great Recession make today’s lending climate a tough one for borrowers.
So when your credit is bad, you may feel like you’re at the mercy of payday lenders and other sources of financial help, sources that will only loan you money if you agree to repay it at high, or “subprime,” interest rates. These loans are fool’s gold. They often you leave more in debt than you should be. In fact, payday loans are illegal in 13 states because of their predatory terms.
To understand how your credit affects your personal loan options, the best place to start is to understand your credit score. Free credit scores are now available at several online sites.
The National Foundation for Credit Counseling says that 60% of Americans haven’t checked their score in more than a year.
Some common signs of a bad credit score include:
- You are paying higher interest rates than you see advertised
- You have stopped trying to pay down debt and are satisfied making minimum payments on high interest credit cards
- You have a history of late payments for housing, utilities or other monthly bills
- Your checking account is overdrawn on a regular basis
- You have problems getting a lease for housing
- Cell phone companies won’t give you a contract
All of these have a negative effect on your credit score, making it more difficult to get a loan. Don’t get sucked into a situation that sounds too good to be true. If you have bad credit and need a loan there are options available but it will take a little time and research to find the one best suited to you.
Credit unions are similar to commercial banks in terms of their services, but they are owned by their members rather than by profit-seeking shareholders. Credit unions are nonprofit institutions, meaning they pass their earnings along to their members in the form of lower fees and borrowing costs and better customer service.
A credit union – especially one affiliated with your employer or one that is community-based – may be willing to look beyond a poor credit history and make a judgment about whether it will loan you money based on your character and your promise to repay, regardless of if you have bad credit or not. Think of them in the way you would a small community bank from years ago.
Although the recent recession forced a number of smaller credit unions around the country to merge with larger ones, almost all credit unions are actively looking for borrowers. If you can afford terms that match your credit history, you are likely to find a credit union somewhere willing to work with you.
If you are thinking of asking a credit union for a personal loan, look for one with which you have something in common. For example, if you are a veteran of the armed forces, you might want to approach the Navy Federal Credit Union. If you are a teacher, there are credit unions created by and for members of that profession.
By joining a credit union, you could position yourself for much more favorable loan terms, regardless of your credit score.
The Navy Federal Credit Union caps its personal-loan annual percentage rate (APR) for members at 18% — and that holds true even if your credit score is 600 or less.
In the same credit situation, a bad-credit borrower might receive a 36% APR from another lender.
Let’s say you have a three-year, $10,000 loan. Here is the total repayment:
The chance to save more than $3,000 makes it worth looking into enrolling in a credit union.
In Shakespeare’s “Hamlet,” the character Polonius admonishes his son Laertes to be “neither a borrower, nor a lender.” While this advice is prudent when dealing with strangers, it might be even more judicious if you’re thinking about borrowing from family members or friends. Not repaying a loan to a relative or close associate can poison relationships in ways that go far beyond a bad credit report.
Nevertheless, sometimes those closest to you are your best sources of funds and a family loan can benefit everyone involved. You should always treat any loan from someone you know just as if it were an important business transaction between you and a stranger. That means it should be formalized with clear documentation and legally recorded. To avoid future problems, create a written contract that includes the loan terms and interest rate, and what will happen if you cannot repay the debt.
If borrowing from a friend or relative is not possible, you can still approach someone with good credit who trusts your capacity to repay the loan and you can ask him or her to be a co-signer on a personal loan from a traditional lender. With a qualified co-signer, the lender will set the loan terms based on the credit score of the person with good credit, who will then be equally responsible for repayment. All payment information will be recorded on both yours and your co-signer’s credit reports, so if you default on the loan, or you’re late with payments, you will severely damage your co-signer’s credit score. However, if you make timely payments, your own score will improve, making it easier to obtain future loans without a co-signer.
If you have equity in your home, you can apply for a home equity loan or home equity line of credit (HELOC). Home equity is the difference between the amount your home can be sold for and your mortgage. Your home is used as collateral, and home equity loans can be obtained regardless of your credit score. The interest rate is usually low, because the loan is secured by the home. Also, the interest you pay on a home equity loan is usually tax-deductible.
Unlike a home equity loan, which is a lump sum of cash, a HELOC acts like any other credit account. You can access money when you need to, up to the loan’s credit limit, and you must pay it back according to a predetermined schedule. In both cases, it is important to remember that tapping your home equity puts your property in jeopardy if you don’t repay the debt. But if you are disciplined and have a reliable source of income, it is an inexpensive way to borrow from a reputable lender if you have bad credit.
One of the benefits of a home equity loan or HELOC is the extended loan term (15 or 30 years). The long term will substantially lower your payment, though you will pay more in interest over that time period.
Peer-to-peer lending, also known as person-to-person lending, is a relatively new loan form, having only been around since 2005. It’s an online platform that allows you to borrow directly from another individual rather than from an institution. Potential borrowers can post a loan listing on various peer-to-peer websites, indicating the amount wanted and what it’s for. Investors review the loan listings and choose the ones they wish to fund.
Your credit score is still a factor, but since an individual investor has much greater leeway in how it is to be weighed these loans are often more readily available for people with bad credit. Lending standards are significantly more lenient and interest rates are usually lower than those offered by traditional lenders. In addition, peer-to-peer websites help evaluate risk for the lender, while verifying the lender’s credentials for the borrower.
If you have been refused credit by your bank or a high street lender,
don't worry, there are still options for you.
If your credit history has had a few bumps in the road in the past, for example if you've missed a payment on a debt, whether this is an overdraft, credit card, personal loan or even a mortgage, you may find it harder to obtain the finance you need.
We know very well how challenging it can be to stay afloat. We all experience difficult times now and then where our finances are concerned, and the Everyday Loans mission statement is to help you get through those times. With the help of a flexible, direct loan you’ll be back on your feet in no time.
Loans are subject to status and affordability. Terms and conditions apply.
Flexible, friendly and transparent with great customer service - at least that's what our customers say!
With everyday loans, you're more than just your credit score.
We offer loans to those with a less than perfect credit score.
With everyday loans, you're more than just your credit score. Here at everyday we look at your credit future, not just your credit history. As such even if you have bad credit now or you've had a poor credit score in the past, we may be able to help.
There are 3 simple steps to taking out an everyday loans loan. All of our loans are subject to status and affordability.
Complete our short
Get an initial decision
Pop into your local branch
to complete your loan
- Applying with us won't affect your credit score. We use Soft Searching Technology which means even if you're unsuccessful; it won't go against your credit file.
- We offer loans to those with a less than perfect credit score. You'll need to be over 18, a UK resident and be able to afford repayments.
- We're a direct lender not a broker. We'll NEVER charge you a fee to consider your application.
- We'll give you a conditional decision in just minutes.
Start Your Application
Where other institutions and banks would turn down your request, we understand that you have an honest and legitimate need for financial assistance and may be able to help where others wouldn’t. It’s what makes us different!
There are few lenders that offer specifically designed loans for people with poor credit histories. Anyone can apply for a poor credit loan but your age, income and employment status will be taken into account before any application is processed. The minimum requirements are that you are over 18 and employed.
It's our belief that more people across the country should have access to a flexible loan when they are in a time of need. Having a poor credit history shouldn’t mean that you can’t get the help you need when you need it most. Managing a credit rating is part of being a responsible adult, and we understand that building back your credit history won’t happen overnight.
With a direct loan provided by us, your short-term financial stability is restored. This gives you the time you need to get things in order to prepare for the weeks and months to come. In time, with support from that bad credit loan, you’ll be back on your feet where money is concerned.
Paying off your loan from us could have a positive impact on your credit history. This, when combined with other responsible spending activities, can get you closer to a positive history and credit rating that will benefit you going forward.
Everyday Loans is one of the UK's leading bad credit loans direct lenders, offering customers a personal face-to-face service that addresses all our customers' financial needs.
Understanding Bad Credit Loans
Let’s start with the term bad credit.
The term "bad credit" is often used to describe an individual's credit score which is less than perfect. However, it's important to understand that your credit report is not measured by brackets like "good" or "bad", but with a number or value that is constantly changing based on a variety of factors.
A poor credit history or, in other words, a low credit rating can often stop you from getting loans from high street banks or building societies. This makes buying a new car or converting that loft into the room you’ve always wanted extremely difficult. This is where a ‘bad credit loan’ comes into play. This type of finance is designed for anyone looking to obtain credit, but who is unable to acquire it from mainstream lenders due to poor credit history.
If you’ve struggled with credit issues in the past, it can be difficult to get a loan from a major high street bank like Barclays or Lloyds TSB. A bad credit loan is designed to help those with less than perfect credit scores. These loans usually come with a higher APR than a traditional loans, but specialist lenders like us are more likely to be able to help you if you’ve had problems in the past.
APR stands for annual percentage rate, it essentially represents the price you will pay for a loan. For example; If you were to borrow £1,000 over 1 year with a 10% APR then you would repay £1,100. This is the very basic premise of APR. However, it isn't quite as simple as that due to something known as compound interest which you can read more about here on the ThisIsMoney website. Once you apply with us and are accepted, your APR and repayments will be explained clearly in plain easy to understand English.
Q3: Can taking out a loan improve my credit score?
Taking out a loan does not improve your score on it’s own, however if you make your payments on time every month without any problems this can indeed improve your credit score. Lenders like to see potential borrowers managing their accounts well and can take it a as a sign that even though you had problems before, you are now making regular payments which could imply those problems are behind you.
Q4: Will applying for a loan effect my credit score?
With some lenders, every time you make an application they put a mark on your credit file to show that it was searched. Too many of these can imply to future lenders that you were struggling to get hold of finance and therefore they should be cautious in lending to you. Here at Everyday Loans we use Soft Search Technology, this doesn’t leave any marks on your credit file that can be seen by other lenders.
Learn more about Everyday Loans and our specialist bad credit loans designed to help you get access the finance you need. Our loan application process is quick and easy, with our professional advisors always on hand to answer any questions you may have.
Q1: What do I need to get approved for a loan?
As long as you are a resident of the UK, have a UK bank account and are currently employed then we may be able to help you. We specialise in helping those with less than perfect credit and use soft searching technology that doesn’t affect your credit score if you aren’t successful, as long as you meet our minimum criteria above then you should apply now to see if we can help.
Q2: How long does it take to get a loan?
If your loan application is successful you will receive a conditional approval. Your application is then handed to one of our local branches that will arrange a time for you to come in and complete your loan. The whole process is quick and easy and you could get the finance you are after in little to no time.
Q3: Can I get a top up on my loan?
If you have been paying your loan on time and without any problems, then after a while you may be eligible for a loan top up. Simply get in touch with your local branch to enquire as to whether you are eligible.
Q4: Is Everyday Loans a direct lender?
Yes, we are a direct lender with our headquarters in Bourne End, Buckinghamshire that specialises in helping people with poor or bad credit. Apply with us today to see if we can help.
We do not charge any fees. If you prefer, talk to us on Freephone 0808 231 5453.
Everyday Loans is a trading style of Everyday Lending Limited (Company registration no. 5850869, England & Wales).
Registered Office and Trading Address: Secure Trust House, Boston Drive, Bourne End, Buckinghamshire, SL8 5YS.
Everyday Lending Limited (Firm Reference No. 724445) is authorised and regulated by the Financial Conduct Authority.
Everyday Lending Limited is a member of the Finance and Leasing Association and as a member, we follow its Lending Code.
Bad Credit Loans We Can Help When Others Can't
We're Here to Help!
Helping People With Bad Credit Since 1998
We are America’s go to place for bad credit loans.
There is no cost to request a loan on our site.
We are committed to educating our Customers. Learn more in our Responsibility Pledge and How It Works.
Help Yourself with a Bad Credit Loan
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Every day, we help people like you secure loans regardless of your credit rating. We’re here to help you find solutions to your financial needs.
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Request a loan any time, day or night. Request the funds you need, and review the offer presented to you before accepting. No fees or obligations.
We’ll help you access funds to pay off past-due bills, fix the car, or take care of whatever is holding you back.
Learn More Your Place For More Info
Resources News & Legal Documents
Scam Alert Stay Informed, Stay Safe
Getting Personal With Bad Credit Loans
At Bad Credit Loans, we understand that there are emergencies no one can plan for, and we aren’t limited to helping only consumers with perfect credit. Sometimes a run of bad luck comes up through no fault of your own. However, as long as you’re working, we have the resources to lend you a helping hand no matter if your credit is good or bad. We want to help inform you on making responsible lending decisions and then connect you to available lenders and financial service providers if you feel a bad credit loan would be right for you.
Bad Credit Loans Can Help
We know that it’s the people who are struggling that really need the personal loans, not those with the spotless credit histories who are paying all their bills on time. A perfect spending history simply isn’t possible for many American households, especially in times like these. No matter how well you’ve planned your budget and spending strategies, they can still be thrown off by one unexpected car repair or other emergency when already living paycheck to paycheck.
Fast, Convenient Loan Requests
Our online system makes it easier than ever to request a loan. Just fill out our fast and convenient online loan request and you can get a personal loan offer in minutes from our network of lenders and financial service providers. Your approved loan can be deposited electronically into your checking account in as fast as one business day.
With the personal loans our lenders and financial service providers offer, you will always know exactly what to expect before you are under any obligation to actually take out the loan. All the lenders and financial service providers in our network strictly follow the Truth in Lending Act, which means that you’ll receive documentation of every last detail of your loan beforehand. You’ll be able to see all applicable interest rates, possible fees, and all other information on your loan, allowing you to make an informed, responsible borrowing decision without any pressure.
The approval process for bad credit loans is very straightforward. We require that you’re a legal citizen and an adult (age 18 or older). You’ll need to provide some other basic information for the transaction to take place, such as a valid email address, working phone number, and the bank account where you’d like the money transferred. It’s that easy.
Combining a fast loan request form and approval process with an equally fast delivery system makes getting a bad credit loan easy.
While we try to connect everyone with the personal loans they want, we are especially concerned with keeping consumers requesting only the loans they need. We offer a variety of free, expertly written articles explaining every part of the loan process. You can also find articles replete with:
- Tips on when to take out a loan
- How to spend the funds responsibly
- How to budget your future income in order to pay off a loan quickly
The Cost of Not Getting a Loan
Financial emergencies can strike without any warning: the car could break down, a bill may have gone unnoticed and unpaid for too long, but really, dwelling on the possibilities could last a long time. and isn’t fixing anything.
At Bad Credit Loans, we are more interested in helping you create solutions. Hoping that an emergency will just “go away” if you ignore it tends to only make things worse via late fees and other penalties. Staying pro-active keeps you informed and in control. A quick influx of much-needed funds, when used responsibly, can be exactly what you need to keep bills from getting out of hand.
Unfortunately, no matter how hardworking you are, it doesn’t protect you in an emergency. Most lenders won’t approve those who are struggling to make ends meet, but at Bad Credit Loans, that’s exactly why we offer our services: We connect you with lenders and financial service providers that are ready to help.
In today’s world, it’s become all too easy to get trapped by finances. Bad Credit Loans gives you a way out by connecting you to the assistance you need to help weather a financial emergency and get back on track quickly and responsibly.
APR – Representative Range Explanation
Bad Credit Loans isn’t a lender and doesn’t provide unsecured loans, but it refers consumers to lenders and financial service providers who may provide such loans. A personal loan from a lender or financial service provider in our network often ranges between 5.99% and 35.99%, although APRs vary according to the information that is supplied by you in your loan request. Your lender will provide you with the APR, loan fees and other terms when you are redirected to your loan agreement during the loan request process. For help with any Bad Credit Loans–related services, feel free to contact us.
The APR on a personal loan from our network of lenders and financial service providers often ranges from 5.99% to 35.99% percent depending on exactly how it is calculated by your lender or financial service provider, the duration of the loan, any loan fees incurred, late payment penalties, nonpayment fees, loan renewal actions and various other factors. Please keep in mind that the APR range and your finance charge are not one and the same. The latter will be disclosed later on in the loan request process.
Following is a representative example of a cash loan APR range:
Borrow $2,000 for 12 months with a 19.9% representative APR and a monthly repayment of $183.63 . Total repayment will be $2203.56.
Short-term cash loans are somewhat expensive when compared with other loan products. They are not recommended as a long-term financial solution, and they should only be taken out for emergency financial needs.
Important Implications to Consider
We would like to remind you that Bad Credit Loans is not a lender, and it doesn’t charge users any fees for its services. Every lender and financial service provider in the Bad Credit Loans affiliate network provides consumers with specific terms, conditions and practices prior to their acceptance of offered loans. Bad Credit Loans strongly recommends that you carefully review the terms and conditions of any loan offer that you receive. For further details about the aforementioned considerations, please see ourRates & Fees and Policy on Responsible Lending Web pages.
When you accept the terms and conditions of a particular loan offer, you are agreeing to pay back the loan principal and finance charges in the amount of time that is specified in the documents your lenders supplies you with. Additional fees/charges by your lender may apply if you are not able to repay your loan in full or if you make a late payment. Bad Credit Loans is not able to predict the amount of the penalties that you will incur as a result of nonpayment, late payment or partial payment. Bad Credit Loans has no control over knowledge of the loan details between you and the lender with whom you are working. Please refer to the nonpayment, late payment and partial payment policies detailed in your lender’s loan documents. Bad Credit Loans makes a concerted effort to work only with reputable lenders who follow Fair Debt Collection Practices.
FINANCIAL IMPLICATIONS (INTEREST AND FINANCE CHARGES)
If you are approved for a personal loan, your lender will inform you of the exact interest rate and fees attached to your loan prior to your acceptance of said loan. As stated earlier, Bad Credit Loans is not a lender and is unable to predict the exact interest rate and fees for the loan option presented to you. You are under absolutely no obligation at all to accept the loan terms that the lender presents you with.
POTENTIAL IMPACT TO CREDIT SCORE
Although Bad Credit Loans does not make credit decisions, we may do a soft credit inquiry as part of the process. Personal Loan lenders in the Bad Credit Loans affiliate network may conduct a non-traditional credit check in addition to a conventional credit inquiry from the 3 major credit bureaus (Trans Union, Experian, and Equifax) to determine your eligibility for a personal loan. If you do not pay back your loan on time your lender may choose to report this delinquency to one or more credit bureaus, with the end result being that your credit score could be negatively affected. We wholeheartedly encourage consumers to consult a credit counseling company in the event that they are experiencing credit problems.
Loan renewal policies are largely governed by state regulations. Your lender will present you with available loan renewal options prior to your acceptance of their loan offer. Please be sure to diligently read the lender’s renewal policy prior to signing the loan documents. Short-term cash loans are meant to be a short-term financial instrument. Bad Credit Loans encourages all consumers to repay their loan in full and on time in order to avoid late payment and/or nonpayment penalties. If you think there’s a possibility you could end up being unable to pay off a personal loan that you borrow, we would recommend that you explore different loan alternatives before requesting a loan through our website.
Again, Bad Credit Loans is not a lender, and moreover, it doesn’t engage in debt collection practices. Your lender’s collection practices will be clearly disclosed to you in the loan documents that you receive. Should you be unsure of the specific collection practices used by a particular lender, we strongly advise that you discuss this issue with the lender directly. Bad Credit Loans makes reasonable efforts to only work with reputable, established lenders who follow Fair Debt Collection Practices.
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BadCreditLoans.com (the “Website”) is operated by Chief LLC (the “Website Operator”), which is a limited liability company established in Nevada. By your use of this Website you consent to the laws and jurisdiction of Nevada as it relates to your use of this Website.
Legal Disclaimer: The purpose of this website is to connect potential borrowers with the lenders and financial service providers that advertise on this website. The operator of this website is neither a lender nor a broker and does not make any credit decisions. This website merely takes information from consumers and forwards it to lenders and third parties who may be able to provide the types of loans that may meet the consumers needs. For those consumers who do not qualify for a Personal Loan, we will refer you to alternative lenders and providers. This website shall not be considered an offer or solicitation for a loan. There is no guarantee that you will be approved for any type of loan. We do not charge you for the service we provide and are not a representative or agent of any lender or third party provider. We are compensated by lenders and third parties. The time it takes for money to transfer to your account will vary by lender and also depend on your individual financial institution. You may be required to fax information to your lender in order to receive a loan. This service and lenders are not available in all states. If you have any question regarding the details of your loan, you should contact your lender directly. Personal loans and other types of loans should not be considered a long term financial solution. They are means to provide short term financing to solve immediate financial needs. Lenders and third party providers may perform a credit check with one or more credit agencies. These credit checks can have an impact on your credit score. By submitting your request, you are authorizing the lenders and third party providers to independently verify the information you submitted and your credit worthiness. Nothing on this website shall constitute an offer or solicitation for a loan.
Online personal loans for people with bad credit.
You need money now, and it’s as simple as that. Because things happen. Maybe a big expense popped up, maybe you need to pay off bills, or rent a moving truck to relocate for a job. And the amount you need isn’t all that much—500 dollars, or maybe a thousand.
In a perfect world, everyone would have a healthy savings account to dip into. But the reality is quite different, because recent studies show that 60 percent of Americans have less than $500 in savings. (1) To make matters worse, more than half of Americans have “bad credit”—a FICO score of 620 or below. (2)
So, if you have bad credit and need money now, you’re not alone. But where can you turn?
Bad credit shouldn’t to lead to high fees and rigid deadlines. We offer bad credit loans with longer terms, larger amounts and APRs up to 125% lower for people with bad credit.
A bad credit loan is a type of personal loan offered to borrowers with weak, bad, or no credit. There are many different loans and many different types of financial institutions that offer them—banks, credit unions, and online lenders, among others.
One characteristic of bad credit loans is that they will generally be expensive. This is because lenders charge higher interest rates to borrowers with bad credit than they do to borrowers with good credit.
So what is a good credit score and what is a bad one? Generally, a FICO score below 630 is considered bad. To see where you fall, use the table below. If you don’t know your credit score, you may be able to access it through your online bank account or credit card statement. You can also get a free credit score through sites like CreditKarma.com and Experian.com.
Loans for Bad Credit FICO Score Range
At this point, you may be thinking: Wait a minute! I have bad credit AND I’m broke. And because of that, a lender wants to charge me EXTRA interest?
Well the answer, sadly, is yes. Lenders are going to charge you extra.
When you have bad credit, it means you have a history of paying your debts late or not at all. (You can read more about credit scores and what they mean in our guide to improving your credit score eBook.) This makes it riskier for lenders to let you borrow money. From their perspective, you already have a history of not paying your debts, so why should they expect it to be any different with them? If they lend you a thousand dollars, there’s a very real risk that they’re not going to be repaid.
To compensate themselves for that risk, lenders charge higher interest rates (the cost of borrowing money) to borrowers with bad credit. This way they make more money on these risky lending arrangements, which offsets the very real possibility of many of their borrowers defaulting (failing to repay their debts).
Say 100 people borrow money and 20 of them don’t pay it back. The lender needs to make enough money on the other 80 to cover the loss on the 20 and make a profit. When they lend to people with good credit, they get paid back more often, so they don’t charge as much.
A bad credit loan may sound like a great idea when you’re desperate for cash, but look a little closer and you’ll see that most bad credit loans will make your financial life much worse in the long run.
Even People with Bad Credit Have Options
There are two basic types of bad credit loans: secured and unsecured.
An unsecured bad credit loan means that borrowers sign a contract and promise to repay their loan according to the terms and conditions of their loan. If they fail to repay their loan, the lender may pursue collection of the money owed through a collections agency or other legal mechanism. Typical unsecured bad credit loans include personal installment loans, credit cards, and student loans.
A secured bad credit loan requires that the borrower use a valuable item—like a car, a home, or a piece of jewelry—as collateral to “secure” the loan. This means that if a borrower is unable to repay the loan, the lender is legally allowed to seize the collateral and sell it to recoup their losses. Typical secured loans include mortgages, car title loans, and pawnshop loans.
Technically, a payday loan is a secured loan. You’re not offering your car or the deed to your house, but with a predatory payday loan, you are securing the loan with a check for the amount you’ve borrowed, plus interest or fees. If you’re unable to repay the extremely high-interest loan by the due date (most borrowers aren’t), the payday lender will cash your check.
Ratings of Types of Loans for Bad Credit
Are Bad Credit Loans safe or dangerous?
Bad credit loans—or no credit check loans—are risky. If your lender doesn’t check your credit, or your ability to repay your loan, that’s a sign that they aren’t offering you a responsible loan. If they don’t care about your credit, they don’t care about you.
Dealing with the Risk in Bad Credit Loans
Say you want to buy a set of used furniture for your living room. You could visit the online used furniture store website with great customer reviews—an A+ Better Business Bureau rating, and friendly and knowledgeable customer service reps you can actually talk to on the phone—or you could buy it from a sketchy looking stranger selling it out of the back of his truck. It’s the same furniture, right? What’s the difference?
Well, whether it’s furniture, cars, home appliances or personal lenders, knowing and trusting the businesses you’re working with matters.
If you need a bad credit loan, you can expect a lot of sketchy strangers to come calling for your business. They’ll promise cash right now without a credit check. And while that all might sound well and good in the moment, you can be sure there’s a catch—sky-high annual percentage rates (APRs), short terms, and a long future of debt rollover.
But don’t panic! If you need a bad credit loan, it can be done safely. Here are the steps we recommend to find socially responsible, legitimate lenders who can get you the money you need now and even help you improve your credit score.
If you have bad credit and need a loan, look for a lender who…
Offers personal installment loans, rather than payday loans
Payday and title loans are the quickest way to ruin your finances. Getting a payday loan is never worth the risk. Remember: four out of five payday loans are rolled over or renewed, (3) and the typical payday borrower spends more than half of the year in debt to their payday lender. (4) And all this for a loan that was supposed to only last two weeks! No matter how you look at it, the odds are stacked against you.
Instead, you can find a bad credit loan from lenders who offer personal installment loans. Personal installment loans come with longer terms, lower rates, and—unlike predatory payday and title loans—are designed to be repaid.
Considers your ability to repay
Your ability to afford your loan is the single most important factor that both you and your lender should consider before you decide to borrow money. While a predatory lender wants to trap you with a short-term, high-interest debt that you won’t be able to repay (leading to a toxic cycle of re-borrowing or extending the life of your loan at the cost of additional fees and interest), a socially responsible lender will verify your income, look at your bank statements, and decide to approve or deny your loan not based on your ability to repay what you borrow.
Performs a soft credit check
You can bet that a lender who doesn’t check your credit at all isn’t interested in your ability to repay your loan. If your potential lender performs no credit check whatsoever, run.
You should also avoid lenders who perform what’s called a hard credit inquiry. These credit checks signal the credit bureaus and can harm your credit score. Hard credit inquiries (or hard credit checks) are typically initiated by lenders or credit card companies—and require your authorization. When a hard credit check is run, it can remain on your credit report for up to two years.
Alternatively, you should seek a lender who will run a “soft credit inquiry” or soft credit check. You can run a soft credit check on yourself, or it could be initiated by a lender, potential employer or landlord. Soft credit checks do not negatively impact your credit score. These are a safe alternative to hard credit checks.
Offers you flexible terms and repayment plans
When looking for a bad credit loan, one of the surest signs you’re dealing with a predatory lender is a short-term repayment structure. Typical payday lenders offer terms of two weeks. Typical title lenders offer terms of 30 days. These short terms (and the astronomically high APRs) make on-time repayment very difficult.
Instead, look for a personal installment loan with longer terms. Generally, longer terms will translate into lower monthly payments, and a more affordable loan that borrowers will be able to repay.
Reports your payments to the credit bureaus
Speaking of repayment… You’re looking for a bad credit loan because you have bad credit. When you repay an installment loan with a lender who reports payments to the credit bureaus, you can actually improve your credit score over time! Check with your potential lender and ask them, do they report on-time payments to the credit bureaus. If they do, you can use that installment loan to solve your short-term problem and grow your credit over the long term.
If you have bad credit, then you are likely all too familiar with the frustrations a low credit score can bring.
You don’t have to live with bad credit forever. Even the most damaging credit mistakes can be repaired over time. The first step toward fixing your credit is to put a stop to the habits that are contributing to your low credit score. Don’t open new credit card accounts, don’t let lenders run hard credit checks on you and don’t let predatory lenders deceive you into taking out harmful, short-term loans that you won’t be able to repay.
With a safe, personal installment loan from OppLoans, you can be certain that our soft credit inquiry won’t impact your credit. We’ll focus on your ability to repay what you borrow. And we’ll work with you to set a flexible repayment plan that fits comfortably into your life. And if you ever have questions, or need help, you can call us! (We’re a lender who answers the phone and actually wants to speak with you—how different is that?)
Taking out a bad credit loan is a major decision. Make sure you’re not just selecting a loan, but also a financial partner who wants to help you succeed today and in the future.
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A quick and easy way to get the loan you need today!
We can connect you with lenders often times even if your credit is bad. Finding loans with bad credit is not often easy. This is because there are usually a lot of hoops to jump through, from the different lenders, to see if you qualify. We are here to simplify the process. Once you submit your information online with us, we connect that with lenders we work with. The process can take two to five minutes and most decisions are fast. We aim to streamline the process and make it easier for you.
When you have bad credit, most lenders see you as a high-risk when it comes to repaying the money you have borrowed. Because of the higher level of risk, there are often more fees associated with each of these loans, which can make deciding on what lender to go with a difficult task. Our company connects you with one of numerous lenders from our network. We simplify the process and your lender can fund the loan as fast as the next business day.
What Kind of Interest Rate to Expect
Paying back a loan requires that you pay back the principal plus interest. The interest rates that you pay are determined heavily on your credit score. When you have bad credit, you can generally expect to pay a higher interest rate than someone with good credit. Many loans fall under the category of an installment loan. An installment loan is a loan for a set amount of money that is to be repaid with interest in a series of fixed monthly payments. It is known as “closed-end” credit. The money can be used for a specific purchase such as an emergency expense, a car, or consolidating debt. While your credit score plays a big part in determining your eligibility (and your interest rate), personal installment lenders tend to look at other factors as well. Interest rates for these type of loans generally range from 5.99% up to 35.99%. With a poor credit score, you can typically expect to pay on the higher end (sometimes even more) of this range.
When desperate, many people turn to payday loans or short-term loans. These loans are meant for smaller amounts of money (typically $500 or less), and are meant to be paid back on your next paycheck. While they are enticing for their ability to get you the money you need fast, their interest rates are incredibly high. You can expect to pay upwards of 400% (sometimes higher) on these types of loans.
Just because you have bad credit, that doesn’t mean that you have limited options when it comes to loans. There are actually a few different types of loans for people with bad credit.
Personal Loans. Personal loans are a type of unsecured installment loan that doesn’t have a specific purpose. It can be used for just about anything, such as a medical emergency, debt consolidation, moving expenses, buying a new home appliance and more. This type of loan is often attractive to those with bad credit because it allows you to avoid using your credit card. After you have received your loan, you are expected to pay it back in regular monthly installments. The length of the loan can vary, usually between 24 and 60 months. Longer repayment periods mean lower payments, but they also mean that you pay more in interest. Personal loans are one of the easiest ways to borrow money. Many lenders offer bad credit loans online which are easy and convenient. Your credit score is a major factor in determining eligibility, and it also plays a part in determining your interest rate. Working with a bank that you already have an established relationship with can help to increase your chances. You can also increase your chances by proving that you can repay the loan, such as showing proof of income and making efforts to improve your credit score.
Car Loans. A car loan is a loan specifically designed to help you purchase a new or used car. These loans are available through the dealership (if you go through a dealer) or through a financial institution (bank, credit union, online lender). Like a personal loan, a car loan is a type of installment loan. Having bad credit can make it more difficult to get a car loan. If you are approved, it typically means that you pay a higher interest rate. You can increase your chances of getting approved in one of several ways. You can work to improve your score. You can also get pre-approved through your chosen financial institution. A pre-approval analyzes your income, expenses and your credit report to determine if you qualify for a loan and how much the lender is willing to provide. You may also want to consider saving up to provide a down payment, which will help to decrease the amount of money you need to borrow. Loan length generally ranges from 36 to 60 months. Some lenders even offer loans as long as 72 or even 84 months.
Payday Loans. A payday loan is a short-term, high interest loan. They are considered “fast cash” loans. The biggest selling point for those who need money in an emergency situation is the fact that these loans are fast. These types of loans are easier for those with poor credit to obtain. The length of these loans is very short, typically 14 days. Instead of installments, you are expected to repay the full amount plus interest by the end of the term. If the amount of the loan plus interest is not repaid when it is due, you can then be stuck with various other fees.
Secured Loans Vs Unsecured Loans. There are two typical types of loans, unsecured and secured. A secured loan is one that requires you to provide some sort of collateral that the lender can take possession of in the event that you do not repay it. For example, when you take out a car loan, the car becomes the collateral. The lender keeps the title until the loan is paid off. You can usually borrow a higher amount (because you have collateral) and interest rates can be fixed or variable. These interest rates tend to be lower and you can have longer repayment periods.
An unsecured loan, on the other hand, does not require any collateral. Interest rates for unsecured loans are generally higher than with secured loans and the rates are fixed. You pay the same amount every month for a designated amount of time. Borrowing limits are lower (due to a higher risk for the lender) but unsecured loans are easier to get because there is less paperwork involved.
When you have poor credit, there are a few things you can do to help secure the loan you are wanting or needing. One of those things is do your best to try and make payments on time as often as you possibly can. The more on-time payments you have, the better your overall credit will look to lenders. Another thing you can do is to open a secured credit card before getting the loan. If you put a little bit on the card each month, it shows up as good payments on your credit report. The more positives lenders can see on your report before deciding on the loan, the better off your loan terms are likely to be.
When you need a loan with bad credit, there are options. We can help simplify the process. Get the loan you need with our help, in no time at all.