Personal loans for bad credit / poor credit

If you need funding and want to get a personal loan for bad credit, here are some basic tips on how to get it. Also, pay attention to the factors that must be met in order for your personal loan application to be approved.

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Personal loans for bad credit / poor credit

Author: 
Emma Jackson
Personal loans for bad credit

Tips for Getting a Bad Credit Personal Loan

Many people need emergency funding from time to time in order to cope with life's difficulties. Please note that it is quite difficult to get paid when you have a bad credit history, as banks usually refuses to approve a loan to borrowers with bad credit history. However, you should not think that the situation is hopeless, since now there are lenders who provide personal loans even to borrowers with fair and poor credit. But you need to remember that people with bad credit run the risk of getting the least advantageous offer and extremely high interest rates so you need to pay attention to these points before signing a contract.

What is bad credit?

Before getting into the main points, it is worth paying attention to what a bad credit history is. A bad credit history is a low credit score or a short credit history. Your credit score may decrease if you miss your loan payments or make them late, or exceed your card usage limit. You should be aware that some negative data remains on your credit report for as long as 7 years.

There are several credit scoring models but the FICO system is the most popular. According to this system, you can understand what your credit rating is:

  • excellent credit score 800-850,
  • very good credit score 740-799,
  • good credit score 670-739,
  • fair credit score 580-669
  • poor credit score 300-579

Thus, if you have fair or poor credit, you are unlikely to be able to get a traditional personal loan. Of course, there are many options available to help you improve your credit history, so it is best to do this before applying. As already mentioned, personal loans for bad credit have very high interest rates, so be careful and avoid the most unfavorable offers.

What is a bad credit personal loan?

Bad Credit Personal Loan is a financing option for people who have bad credit history, who have missed payments or exceeded their credit card limits in the past. These loans can be either secured or unsecured, however, in any case, you will have to pay a large amount in interest. Please note that secured loans have better lending terms as the lender receives additional guarantees that you will be able to repay debt.

It is also worth noting that the requirements for obtaining a personal loan may differ from lender to lender. Thus, by comparing offers from different lenders, you can find someone who offers less strict selection criteria and more favorable interest rates.

How to get a personal loan for bad credit?

Of course, it can be difficult to find a lender who is willing to provide a personal loan to a borrower with bad credit, but it is possible. In order to do this, study the main factors that can help you find the loan you need.

  1. First of all, it is very important to check your credit score. You should know that you can request a copy of your credit report for free every 12 months. Knowing your credit score, you will be able to understand what interest rates and credit conditions you can get.
  2. Find the right lender. The best way to find the best loan offer is to compare options. Check out the large number of lenders that offer personal loans for bad credit. Examine interest rates, credit terms and eligibility criteria. Thus, you can find the most convenient offer for you and get a personal loan.
  3. Apply for a secured loan. As already mentioned, a secured loan gives creditors additional guarantees that you will repay the debt on time otherwise you will lose your property. Thus, by providing collateral, you can get more favorable interest rates and credit conditions.
  4. Use the co-signer service. If you have someone who is willing to become your co-signer it will be a great advantage when applying for a loan. However: remember that if you cannot pay the debt on time, your co-signer will have to do it for you.
  5. Collect all required documents. In order to get a loan, you will need to submit to the lender some documents, for example, payments from the bank, tax documents, and so on. If you have bad credit, pay attention to the paychecks, as proof of income will be the main factor affecting your approval.
  6. Use a prequalification procedure. Many lenders offer you to pre-qualify so that you can understand if you can get a loan, as well as what lending rates and terms you can get. This way, you will be able to understand whether you will receive financing without having to go through a hard credit check with each lender.
  7. Make sure you can repay the loan. If you have a bad credit history, then you have had late payments in the past. Please note that a missed loan payment can not only worsen your credit, but also bring additional problems and debts that will be difficult to pay off. Thus, pay attention to your strengths before looking for a lender who will provide you with a personal loan for bad credit.

How is a credit score calculated?

If you want to improve your credit score before applying in order to get better interest rates, you need to know what it consists of. Let's take a look at the main factors:

Payment history accounts for the largest portion of your credit account (35%), which is why it is so important to make all payments on time. Amount you owe is also very important as it is 30%, therefore it is obligatory not to have a lot of debt and not to exceed credit limits. The length of credit history is 15% of your credit score, so it is important to keep it as long as possible. New credit and credit mix are 10% each of your credit rating. Thus, in order to have a high credit score, it is important to pay attention to all of these factors, not just one of them. Remember that credit history can be improved, but it takes time.

Is it possible to get a guaranteed personal loan for bad credit?

Although you can find a lender who is willing to provide you with a loan, there is no such thing as a guaranteed loan. Typically, lenders do not offer guaranteed approval.

However, you can still get a personal loan for bad credit if you meet the basic criteria of a lender.

What are the requirements for getting a personal loan for bad credit?

Since you have a bad credit history, the main factor influencing loan approval will be the source of income. If you have a regular monthly income and you can prove it, you can find a lender who can provide you with a personal loan. Also you must:

  • Be a US citizen or official resident
  • Be over 18 years
  • Provide government-issued ID
  • Provide Social Security Number
  • Provide contact details
  • Provide an active bank account

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APR Disclosure. Some states have laws limiting the Annual Percentage Rate (APR) that a lender can charge you. APRs for cash advance loans range from 200% and 1386%, APRs for installment loans range from 6.63% to 225%, and APRs for personal loans range from 4.99% to 450% and vary by lender. Loans from a state that has no limiting laws or loans from a bank not governed by state laws may have an even higher APR. The APR is the rate at which your loan accrues interest and is based upon the amount, cost and term of your loan, repayment amounts and timing of payments. Lenders are legally required to show you the APR and other terms of your loan before you execute a loan agreement. APR rates are subject to change.

Here's a quick example:

You borrow $1,000 with an APR of 3% over 3 years (assuming an annual APR calculation).
Year 1 interest: 1,000 x 0.03 = 30 and 30 + 1,000 = 1,030
Year 2 interest: 1,030 x 0.03 = 30.9 and 30.9 + 1,030 = 1061
Year 3 interest: 1,061 x 0.03 = 31.83 and 31.83 + 1,061 = 1,092.83 In total, you'll pay back $1,092.83 at the end of the finance period.

For peace of mind, and to ensure you know what you're going to pay, ask your lender exactly what fees are included in the APR figure they offer you.

Material Disclosure. The operator of this website is not a lender, loan broker or agent for any lender or loan broker. We are an advertising referral service to qualified participating lenders that may be able to provide amounts between $100 and $1,000 for cash advance loans, up to $5,000 for installment loans, and up to $35,000 for personal loans. Not all lenders can provide these amounts and there is no guarantee that you will be accepted by an independent, participating lender. This service does not constitute an offer or solicitation for loan products which are prohibited by any state law. This is not a solicitation for a particular loan and is not an offer to lend. We do not endorse or charge you for any service or product. Any compensation received is paid by participating lenders and only for advertising services provided. This service and offer are void where prohibited. We do not control and are not responsible for the actions of any lender. We do not have access to the full terms of your loan, including APR. For details, questions or concerns regarding your loan please contact your lender directly. Only your lender can provide you with information about your specific loan terms, their current rates and charges, renewal, payments and the implications for non-payment or skipped payments. The registration information submitted by you on this website will be shared with one or more participating lenders. You are under no obligation to use our service to initiate contact with a lender, register for credit or any loan product, or accept a loan from a participating lender. Cash transfer times and repayment terms vary between lenders. Repayment terms may be regulated by state and local laws. Some faxing may be required. Be sure to review our FAQs for additional information on issues such as credit and late payment implications. These disclosures are provided to you for information purposes only and should not be considered legal advice. Use of this service is subject to this site’s Terms of Use and Privacy Policy.

Exclusions. Residents of some states may not be eligible for some or all short-term, small-dollar loans. Residents of Arkansas, New York, Vermont and West Virginia are not eligible to use this website or service. The states serviced by this website may change from time to time, without notice.

Credit Implications. The operator of this website does not make any credit decisions. Independent, participating lenders that you might be connected with may perform credit checks with credit reporting bureaus or obtain consumer reports, typically through alternative providers to determine credit worthiness, credit standing and/or credit capacity. By submitting your information, you agree to allow participating lenders to verify your information and check your credit. Loans provided by independent, participating lenders in our network are designed to provide cash to you to be repaid within a short amount of time. The short-term loans are not a solution for long-term debt and credit difficulties. Only borrow an amount that can be repaid on the date of your next pay period. Consider seeking professional advice regarding your financial needs, risks and alternatives to short-term loans. Late Payments of loans may result in additional fees or collection activities, or both. Each lender has their own terms and conditions, please review their policies for further information. Nonpayment of credit could result in collection activities. Each lender has their own terms and conditions, please review their policies for further information. Every lender has its own renewal policy, which may differ from lender to lender. Please review your lender’s renewal policy.

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