Best Loans for Bad Credit
If you have a lower credit score, you'll find limited options if you need to borrow money from lenders and about 56% of Americans consumers have subprime credit scores. Luckily, there are some available that offer bad credit loans. These lenders make it simple to apply through their secure websites and with certain ones, you can find out if you qualify without hurting your credit score.
Most lenders will have criteria you have to meet to qualify for the loans. In many instances, they'll examine your credit histories and employment information to make a determination. If you have a lower score, you might still qualify, but you'll likely pay a higher interest rate for the amount borrowed.
Best Bad Credit Loans: What to Consider
Some also allow you to find sponsorships for the loan, which is where they will pay the lender if you default. This approach is beneficial because it can help you qualify for a lower interest rate and you might even be able to borrow more than you thought you could, because you have people financially backing you.
With all these things in mind, if you do need to borrow money here are some things you should consider before using an online lender:
How does the lender treat its customers? An easy way to research this is by looking up the company directly on the Better Business Bureau's website. They assign a grade from A to F taking factors such as customer service into account.
Does the lender charge for anything other than the interest rate on the loan? Some online lending institutions might give you a loan then charge you a specific percentage of that amount as an origination fee. For illustration purposes, say you borrow $5,000 and the lender assesses a five percent origination fee on your loan; this equates to $250 you have to pay just for using the service. Therefore, be sure to investigate the fees a lender charges before going with them.
3. Repayment terms
Many lenders for bad credit loans have limited terms, meaning you could have anywhere from one to three years to repay the debt. With this in mind, it's important to know the terms before signing a contract because shorter repayment terms mean higher monthly payments that can eat away at your budget.
Personal Loans for Bad Credit - Compare Offers Carefully
Because lenders of any kind will vary considerably in their terms, it is necessary to compare bad credit loan offers in order to determine which one is really good for you.A loan offer may vary in thousands of dollars, and some may cost you thousands of dollars more in interest! Other offers may only give you four years to repay it, but another lender may give you 5 years.
Never Borrow More Than You Can Pay Back
Being that your credit score is not as high as it could be, you do not want to make it any worse. A credit score is based primarily on how well you maintain your monthly payments. When they are not as consistent as it should be, your credit score suffers. In order to raise it back up to where it needs to be, you must make your monthly payments on time and you must pay at least the minimum amount.
Online Loans for Bad Credit Alternative
An alternative to a large bad credit loan with high interest would be to get a small one that can be paid off rather quickly. If you can afford the extra time, this option would enable you to raise your credit score some, which will enable you to borrow more, get better interest rates, and also possibly get a longer repayment period.
Keeping these factors in mind, it's important to first consider the need of this loan. If it isn't for an immediate need you should wait a few months to save some money that way you won't have to borrow as much. Another approach you can do is to find out what the monthly payment will be for the loan then factor that into your budget. Play around with it for a few months before committing to the loan to ensure you can make the payment comfortably.
The Best Bad Credit Loan Companies
If you are looking for a bad credit lender and need a loan fast, you can be sure that they are around. Here are five of the top bad credit lenders and some details about each of them. They are more or less open about their requirements and what they expect.
- Customer support is available seven days a week
- A transparent application process whereby applicants can check their rates without hurting their credit
- Relatively low max loan
While lenders often have different terms of what "bad credit" means and who they will lend money to, Avant lowers the bar below many others, giving access to borrowers that most other lenders won't consider at all. In fact, they tend to focus on borrowers who have a credit score that ranges between 600 and 700. For those with a credit score lower than 580, it is unlikely that a loan is available for you. Secured loans are not available.
- Quick application process
- Flexible repayment terms
- Approval for all credit types
- Pairing service, meaning they won’t be the primary lender the applicant uses
- Large range of interest rates making this an expensive option for applicants with low scores.
PersonalLoans.com is not an actual lender, but rather a organization that puts people in need with other third party lenders (peer-to-peer, not banks). As such, they may do a quick check on your credit, but the actual lender is apt to do it again and look at it more thoroughly. PersonalLoans will look at your information, find a lender, and then direct you to the lender's webpage. There are no hidden fees or any cost to use the PersonalLoans website. The requirements for a loan from PersonalLoans are a credit score of 600+, with a verifiable income of $2,000 per month. They will also lend money to self-employed individuals.
OneMain Financial Loans
- Helpful and informative website
- Offer both secured and unsecured loans
- Loans up to $15,000
- Fixed rates
- Quick application processing
- High interest rates
- Lower credit accepted
- Customer service available seven days a week
- No origination fees and no prepayment penalties
- Reports timely payments to two credit bureaus
- Smaller loan amounts compared to other online lending options
NetCredit sounds similar to other bad credit lenders. One thing that is different is that they allow you to return the loan on the next day by 5 pm CT if you do not like it or change your mind. The company is backed by Enova International, Inc., which has served more than 3 million customers. They also have an online form that quickly lets you know how much you qualify for, which will not affect your credit score. Once you know the loan amount, you can choose between several options for repayment terms. They are also unique in that they promise no late fees or prepayment fees. No other one does that. They claim that they will be offering secured loans before long.
- Applicants can apply online or stop by one of the over 800 branches available
- Great customer support and an A+ by the Better Business Bureau
- Loan funding options for a wide variety of purposes
- Unlike other lenders, Springleaf has limited hours to contact its customer support
- Given the criteria they use, it’s an expensive option for those that have lower credit scores
SpringLeaf has been in business for 95 years and has served as many as 3.5 million customers. They have an advantage of over 800 branch offices which enables customers to be able to apply online or in person. One thing that they do not make clear is that there is no page revealing their interest rates or typical fees.
Advice for Finding the Best Loans for Bad Credit
When you are looking for bade credit loan advice, you need to be extra careful. Some lenders will try to take advantage of you.
- Look over the loan details carefully. Many bad loan lenders would be very glad to get you to sign on the dotted line without looking at the details of the loan. Of course, it does not matter much if you have not already performed a comparison with what other lenders have to offer. Look over the loan agreement carefully to make sure of the terms. Check the total loan amount, the interest rate, any additional fees, and the size of the monthly payment. Also be sure to look at late fees. Learn more tips about how to get bad credit loans.
- Never borrow if you do not have to. If you are able to hold off borrowing money, it really is a good idea to wait. Getting a loan for debt consolidation can be a good way to go if it will enable you to get a better handle on your debt and get lower overall monthly payments. The one thing to remember about this method, however, is that the longer repayment period may also result in paying more in interest than you would with a shorter term. The best way would be to increase your payments as much as possible each month to get debt free as soon as possible. Some of the above bad credit lenders mention that you can use the loan for any purpose, including debt consolidation, vacation, new car, etc. A couple of them emphasize only obtaining the loan for debt consolidation. Using a bad credit loan for anything other than debt consolidation does not make much sense because it only means more debt! Don't pay for anything else on credit! Learn more about saving money on your bad credit loan.
- Watch for an early repayment penalty. Some lenders will have a clause in the agreement that declares you will need to pay an extra fee if you pay off the loan early. Most likely, it means you will really not be saving much money by doing so. Instead, look for lenders that do not charge this fee, enabling you to save money in interest. There is, unfortunately, a downside to bad credit loans that you will want to know about before getting one.
Best Personal Loans for Bad Credit Recap
Ultimately, bad credit lenders are available if you need them. Often, you can apply online, find out if you qualify within minutes and even receive funding in as little as one business day. However, it's important to be mindful of the fees the lender charges, which can reduce the amount of money you can borrow. As with all forms of borrowing, it's important to budget the monthly payment to make sure it fits into your finances first.