Do you have bad credit? It may seem hard for you to get a loan with reasonable terms and affordable rates. However, there are several bad credit loans that are ideal for you. You may be unable to get the ideal loan for yourself. One of the things that you can do to improve your chances of securing bad credit loans is having a cosigner.
Some financial experts also recommend going for non-traditional sources of loans. Before you apply for bad credit loans, check your credit report. Some of the information in your credit report is used when calculating credit scores. What loans can you get with bad credit? You will learn about the options you have in the section below.
Which Loans can you get with Bad Credit?
Even if you have bad credit, there are several loan options that you should consider to pay for your emergency expenses. The following are some of the options:
1. Payday Loans.
The loans are some of the most popular options for people looking for bad credit loans, and the amounts usually range between $100 and $1,500. Payday loans have a two-week term that is payable in a single lump sum on the next payday.
The number of payday loan locations have increased significantly over the years, which have extended tens of millions to millions of households. One of the main drawbacks of payday loans is that borrowers are required to pay high-interest rates.
The bad credit loans are easily accessible for many borrowers. Most payday loan lenders process loan applications immediately, and borrowers can access the loan amounts within 24 hours. For some lenders, payday loans are available 24 hours a day, 7 days a week, and on online platforms.
Payday loans offer fast cash to cater to unexpected expenses, which should be repaid in a short duration. Since payday loans are unsecured, you will not risk losing your property by borrowing payday loans.
In case of loan defaults, where you cannot afford loan repayment amounts, your property will still be safe. The seizing of assets of borrowers in the event of loan defaults is common when it comes to traditional loans.
No credit checks are required when it comes to payday loans. It is one of the main reasons why payday loans are popular bad credit loans. Most borrowers avoid filling loan applications because of the risk of rejections. By borrowing a payday loan, you will not need to worry about credit inquiries.
2. Pawn Shop Loans.
Millions of people visit pawn shops annually for loans. Even though banks and other financial institutions have been trying to come up with competitive rates and terms, some people consider pawnshop loans as safer alternatives when it comes to bad credit loans.
Unfortunately, the maximum loan amount from most pawn shops is $100,000. If you have a financial emergency that needs small amounts of money, consider visiting a pawn shop. One of the main reasons for the popularity of pawnshop loans is that they are instant.
Before the approval of pawn shops pawnshop loans, a borrower must have collateral. The loan amount is a percentage of the value of an asset that has been provided as security. Once you agree on the loan terms, the pawnshop attendants will take your collateral and offer the agreed amount immediately.
Just like most bad credit loans, no credit checks are required for pawnshop loans. The shops do not mind whether your credit score is positive or negative. The main requirement for securing pawnshop loans is possessing a valuable asset.
You do not need to have an asset worth millions. Usually, a pawn shop offers small amounts of loans. Therefore, you can offer items such as a golden ring or vase as collateral for the loan amounts that you need.
Some borrowers avoid getting some loans as the loans may have a negative impact on their credit scores. When you default loans or from banks and other financial institutions, the negative information will reflect on your credit profile.
Additionally, unlike traditional loan applications, no tiresome interrogations or lengthy paperwork are required when seeking loans from pawn shops. Items that have been provided as collateral are stored safely. The main drawback of pawnshop loans is that your asset could be sold if you do not repay your debt.
3. Title Loans.
Title loans are also common bad credit loans. To secure the loans, you must have enough equity in your car. Most lenders require borrowers to pay off other loans used to purchase a car before applying for title loans. However, some lenders may approve title loans even if you have outstanding auto purchase loans.
Title loan amounts range between $100 and $5,500. The amount of title loan that you can borrow will depend on the value of our car or the equity you have in it. The higher the value or equity you have in a car, the higher the loan amounts you can get.
One of the precautions that title loan companies take when issuing the loans is the installation of GPS tracking devices on vehicles to prevent people from hiding the vehicles instead of repaying a loan.
Credit unions and banks also offer title loans. Usually, a title loan should be repaid within 15 to 30 days. If you are unable to repay the loan within the agreed period, lenders may allow rolling over, where your repayment period is extended.
4. Personal Loans.
You can also get bad credit loans from personal loan lenders. There are many reasons why borrowers may apply for personal loans. People with bad credit may have doubts about their eligibility for personal loans.
The process of borrowing personal loans for people with low credit scores is not easy. Take time to research extensively and choosing where to apply wisely. Before you apply for personal loans, gather your personal information and review the information on your credit report.
You should then focus on improving your credit scores. Some of the actions that can help you to improve your scores include timely bill payments and limiting hard credit inquiries.
Finally, bad credit loans are ideal for many uses. Take time to understand the options you have and the best loan for your needs.