Every once in a while we meet financial difficulties that seem just too hard to solve. Such an example will be if you needed a loan but your bad credit history made it impossible for you to get a loan. However, there is a way to get a loan even if you don’t have the best credit history. It is no surprise that all lenders do not make bad credit loans. Most lenders consider people with bad credit as someone who will default on loan payments, and these lenders will not take on that risk. However, there are some lenders who are willing to accept credit risks than conventional lenders, such as banks and credit unions, or even popular subprime non-traditional lenders. The lenders, who do provide loans to people with bad credit, set the interest rate usually very high. Nonetheless, there are lenders who provide Short-term loans for bad credit. These lenders do consider that there can be many reasons for a person’s bad credit.
Short-term Loans For Bad credit
Short-term loans for Bad credit are made for people who suffer from an imperfect credit report. This does not mean that there will be no credit checks. All the lenders are required by law to perform credit checks on all customers. However, lenders have the option of ignoring it and focusing on customer’s employment. Your first priority should be to try and improve your credit. You need to evaluate your existing credit, repay all the debts by making a plan and you can try debt consolidation. You will not get good credit by just repaying the debt. Nonetheless getting back to zero is a good sign towards rebuilding credit.
- This type of loan can help people proceed with big purchases despite of their poor credit.
- This loan can also help you improve your credit score.
- The biggest disadvantage of these loans is that the interest rate of these types of loans is party high as compared to standard loans.
Finding the Best Loan if You Have Bad Credit?
Don’t make a rushed decision and make sure to research and evaluate all the options to find the best short-term loans for bad credit option. You need to find a lender who knows your credit score doesn’t represent the bigger picture. You need to make sure that you don’t fall for scams. We will of course help you so you can avoid scams. It’s always easier to understand things when you break them down. We have broken down some important factors that you need to take into consideration when looking for short-term loans for bad credit.
- Higher loan limits: it is very common for lenders to offer low amount of loans to people with bad credit. However, you need to find a lender that allows you to borrow a big amount of money.
- Reasonable APRs: Unfortunately with bad credit, you cannot get a loan with a low interest rate. However, you need to be looking if they have excessive APRs. So it is important to look out for lenders who have competitive interest rates relative to your credit.
- Reasonable fees: usually loan fees include an origination fee, late payments fee, prepayments fee and unsuccessful payment fee. There are some lenders who may not charge any kind of fees but those are just too good to be true. You need the type of lenders who keep their fees to a minimum.
- Flexible terms: when you borrow a loan you may want to pay it off as soon as possible but sometimes you need a longer-term repayment to keep the repaying amount low. You need lenders who do not lock down the term of payment but allow you to choose payment terms according to your flexibility.
- Reputation: before taking a step further into loan taking you must search for the company’s review online. There are many sites which provide non-bias true review of lenders. Don’t just read a review from one site make sure to search extensively.
Beware of Scams
Bad credit puts you in a vulnerable spot when you want to search for a loan. However, even if your terms are not as favourable as they would be with excellent credit, that doesn’t mean you ought to accept any old offer. We are here to help you keep your eyes peeled for these red flags as you begin searching for Short-term loans for Bad credit:
- The ‘Guarantees’: Legitimate lenders don’t need to tell you that you can get a loan without first asking for your income, credit history, and other personal information. Any lender who guarantees that they approve you before assessing your information is almost certainly bad news.
- Upfront fees: according to the law lenders cannot charge you simply for filling out an application.
- A lot of uninitiated contacts: you need to be careful if you’re getting constant emails or calls from a certain company. Legitimate lenders don’t pursue potential customers like this.
- Unnecessary requests for personal information: You must only give personal information to a company you trust after you know what kind of loan you want to apply for. Be very careful about giving out information over the phone, especially if you didn’t call first.
Improve your credit
Since you are here because you have bad credit we want to help you one step further and help you improve your credit to lessen future problems.
- Know your credit report: it is good to know your credit history. Most of us don’t even know what bad credit is and we don’t keep tabs on our credit score. Having a full credit report can help you see if there are any errors or if there has been any deceitful activity on your credit. If you find a deceitful activity make sure o file a dispute.
- Make more payments, and do it on time: one simple way to raise your credit score is to pay your bills on time. If you have difficulty paying bills on time then you can surely set up an automatic payment method that can save you from forgetting.
- Don’t use most of your available credit, even if you pay it off on time: the ratio of your credit utilization should be no more than 30%. This means your outstanding balance vs. the total limit of your credit. Such as if your credit limit is 10,000 but you are charging more than 3,000, this can have a negative impact on your credit score. Even if you pay off the balance every month.