Procuring a loan whilst having bad credit can be a nightmarish experience. To avoid the unpleasantness, it is imperative to choose a lender who is transparent about fees and rates, has flexible terms and will consider you as more than just a credit score. The things to stay clear off are predatory lenders, scams which have the potential to pull you into a vortex of debt.
One of the contributing factors to a bad credit score is having excessive debt and other bad financial habits. There are many reasons as to why one avails a loan, but one unexpected benefit is to improve your credit score (upon adhering to the repayment terms and guidelines). Traditional lenders may reject your loan application if you have a history of missed payments.
What does bad credit mean to lenders:
Banks perceive you as unable to repay the loan
As a means to diminish their risk, you might be slated for a lower amount of loan eligibility
More collateral might be expected from a borrower with bad credit to be eligible
The interest rates offered are higher than those with average and above credit
Most traditional lenders do not consider loan applications of a certain credit score and below
The qualifications required to avail a personal loan, in spite of bad credit, is quite simple. It requires that you are a legal US citizen of age 18 and above, basic information such as work and residential contact address and bank account details.
As an alternative to personal loans, unsecured online loans are designed to help you with short-term financial assistance. The lenders offering these loans do not require you to have a perfect credit score. Some features are fast approval and funding, large lender network, and the loan can be used for any purpose. Other than having a bad credit, the APR deciding factors are many the lender, which state you live in, age, income, having a valid checking account, duration of the loan, late payment penalties, loan renewal actions and various other factors. APR’s also vary based on the information provided by you on the application. APR and the finance charge are not one and the same. The latter will be disclosed later on in the loan request process.
Before agreeing to a loan, especially a bad credit personal loan, please review the information provided by the lender ( information on loan details, APR, loan term, fees, penalties). Always shop around for the loan that best fits you and your pocket.