Find out how to get a bad credit loan and build your credit score.

Got damaged credit but need a loan? Bad credit loans can help you in a pinch and allow you to pay over time.

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Bad Credit Loans

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Please note that loan amounts, interest rates and other loan terms may vary according to your state and credit profile.

Patch Your Financial Holes With a Bad Credit Loan

The roads of finances take us down can be rocky and unpredictable. Sometimes, despite our best efforts and intentions, we need an amount of money quickly.

Do You Need a Personal loan?

Even a rigid budget may fail due to unavoidable circumstances. An employment setback, relationship breakup, emergency medical or dental expenses, accidents, vehicle repairs, and innumerable other unexpected expenses can blow up our budget and leave us needing more money in a hurry.

When these types of emergencies occur, we may have no option but to borrow money to cover the unplanned costs and get us through the tight financial spot.  

Can You Borrow From A Regular Lender? 

If you have a short credit history or have a poor credit record or score due to having made some financial missteps such as late or missed payments, bankruptcy, severe delinquency, or maxed out credit cards, your application for a loan from a regular lender like a bank, is likely to be rejected.

This will limit your borrowing options. You may need to apply to a bad credit lender. 

What Is A Bad Credit Lender?

You may still have options from a variety of lenders who will lend to people regular lenders have turned down. Still, these options are more limited and are likely to be on less favorable terms.

These lenders are called bad credit lenders and include various banks, credit unions, and online lenders. They vary in the strictness of their requirements and in terms of their loans.

Because bad credit lenders consider lending to people with poor credit scores riskier, they generally charge higher interest rates and fees.

What Is Bad Credit?

Bad credit generally refers to a person’s credit score being less than 580. This score is worked out using information from your credit reports, which summarise your borrowing history.

They help lenders decide whether or not to approve loan applications and influence the loan terms. Most regular lenders will not consider lending to people with credit scores below 580.

Sometimes, even slightly higher scores will not lead to a successful application. Even an application to a bad credit lender is not guaranteed to be successful.  

What Are Bad Credit Loans?

Bad credit loans are loans made to people who do not qualify for loans from regular lenders due to their low credit scores.

Fortunately, the recent financial revolution has made it possible to apply for various types of personal loans for bad credit. A big advantage of these is that they bear a lower interest rate than credit cards, making them a financially better option.

There are various types of bad credit loans. They vary in their terms, interest rates, fees, and whether they are secured or not. If they are secured, you will need to put up collateral such as an asset you own like a house or car that the lender may claim if you default on the loan.

However, most bad credit loans are unsecured, so if you don’t own an asset, this needn’t put you off applying for the loan. 

A benefit of bad credit loans is that they allow borrowers to build better credit ratings through manageable payment options over time. These differ from payday loans, often requiring a lump-sum repayment on the borrower’s next payday, allowing the borrower to spread out their payments.

When a borrower makes their payments on time, the lender will report it to one or several of the credit-reporting agencies, which can increase the borrower’s credit score. This has a positive effect on the likelihood and terms of any future borrowing.

How Do I Compare Bad Credit Lenders?

It is always wise to compare lenders before settling for one lender, as rates can vary significantly between bad credit loans. One may have lower payments, but the lender may have spread it out over more time, resulting in the borrower paying more interest.

Use our comparison calculator tool to find the best bad credit loans for your situation. Some of the best bad credit loans have the following terms:

  • No limits on how the borrower can use the loan.
  • Interest rates are lower than payday loans.
  • Require no collateral, so you won’t risk losing your property if you default.
  • Flexible installments you can comfortably meet over a period of time.

Because of the variable factors involved, you will need to shop around thoroughly when looking for a suitable emergency loan from a bad credit lender. 

Can I Get An Emergency Bad Credit Loan Quickly?

Sometimes you need money as soon as possible to help resolve your financial emergencies, and you don’t have the time to go through the whole brick-and-mortar loan process.

Applying for bad credit personal loans online can be the perfect solution. The process generally takes from between one day and a week.  

Find out more about emergency lending here.

How do I get a bad credit loan? 

Check your credit report. This will give you the opportunity to address issues that may be negatively affecting your score and hence may enable you to improve your score.
Check your finances. You need to ensure you have the income to enable you to maintain the new loan repayments. 
Check pre-qualification online.This allows you to check online whether or not you qualify for the loan. 
Shop around. With pre-qualifying at various lenders, you can check out and compare them.    Submit an application.   

Loans For Bad Credit

Bad credit loans give you the cash you need now and eliminate the need to explain your situation to the bank. You simply enter your information and collect your cash.

Remember, though, you should only use these loans in emergencies, such as a car or home repairs, or an unexpected medical bill. Using them unnecessarily can lead you down a rough financial road.

Author Financer.com

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Last Updated: July 14, 2020