People need money – it’s a fact of life. Something can happen at any time that could cause you to need some quick cash, and if you don’t have much savings, you may need to take out a personal loan. Some people take the ability to get a personal loan for granted, but if you have bad credit, this might not be so easy for you. So, are there any loans for bad credit out there? Getting a personal loan will certainly be more difficult, but there are definitely loans out there for bad credit scores. To make sure your credit does not go any lower, make sure you check the monthly payments and ensure you can pay them. Comparing lenders is a good way to start to get the best deal possible:
What is Considered Bad Credit
First of all, what do lenders consider ‘bad credit’? Generally speaking, if your FICO score is below 580, you are considered to have poor credit. Lenders generally prefer to lend to people with a credit score of over 600. A higher credit score is an indication that a borrower is more likely to repay, and repay on time. In fact, MyFICO.com reports that over 60% of those with a low credit score end up becoming delinquent on at least one account. Consequently, lenders really aren’t fond of shelling out money to people with bad credit.
Lenders who do lend money to people with bad credit normally have very restrictive terms – for example, you might only be able to borrow a small sum, you might need a co-signer, or you might only have access to secured loans. But the reality is that some of us do end up with a low credit score for some reason. So, what do we do? Luckily, there are some trusted lenders out there who are accommodating to those of us with low scores and offer loans for bad credit.
Loans for Bad Credit
- OppLoans is one option if you have bad credit and need a personal loan of between $500 and $4,000. OppLoans is accommodating to those of us with low credit, and loan terms can extend up to two years.
- OneMain Financial also offers loans to those of us with bad credit scores. In fact, OneMain does not have a minimum credit score requirement! If you have poor credit, a major benefit of borrowing from OneMain Financial is that this lender offers both secured and unsecured loans. An unsecured loan is one that does not necessitate you putting up something of value for collateral, like a house or car.
- CashUSA is another favoured lender for those with bad credit. CashUSA pays out loans in as little as one business day, and will offer loans of up to $10,000. You can get up to three years to repay, and CashUSA even offers educational materials on debt management!
Types of Loans for Bad Credit
Having a bad credit score limits the types of loans that you have access to. With bad credit, it’s possible that you can access payday loans and cash advances, short-term loans that are typically repaid within a month. Auto vehicle loans, where you put your vehicle up for collateral, with the risk of it being repossessed. And installment loans, which require you to pay a certain amount of money each month. Some banks also offer credit builder loans that are specifically created to help those with bad credit improve their scores. While you can access these types of loans with a bad credit score, the best option for the future of your finances is to work at improving your credit rating. You might be nervous about it, but the first step in improving is figuring out exactly where you stand.