There are a lot of reasons why you might need to borrow money online: from fixing your vehicle to an unexpected bill. But it can be very difficult to get a loan if you have a low credit score as lenders will see you as more of a risk to lend to.
Even if you need to apply for a loan quickly, you should do your research so you can consider what the best loan would be for you. Here is a simple guide to borrowing money if you don’t have a good credit score.
Before you fill out a loan application it’s recommended that you check your credit report, you can do this for free at Experian. You can find out your credit score and see your historical financial information— which is used by lenders to determine if you are eligible for a loan.
To approve your loan application, lenders want proof that you can afford to make the repayments. You need to have a regular income so you can repay the loan amount plus accrued interest. Some lenders may require further convincing, and ask for someone with a better credit score to cosign your loan.
Rather than finding the first lender in your search results, compare a variety of lenders and the types of loans they offer. Some may offer lower interest rates or have more suitable repayment options.
Fortunately, there are several options for people who need a loan with bad credit, although most of these types of loans come with a high-interest rate. Here are some of the types of cash loans for people with bad credit that we can find for you!
If you need to borrow more money for a longer-term, an installment loan could be a good option. You can repay installment loans over several weeks or months, and if approved you can get the cash on the next working day.
Similar to an installment loan, payday loans for bad credit can be used for any financial situation. However, an online payday loan is usually a smaller loan amount and is typically repaid within one month.
This type of bad credit cash loan is attained by using your vehicle title as collateral to secure the money. A vehicle title loan can be a good short term loan option for bad credit, as you can get the money on the same day. The risk is that if you don’t make the repayment, your vehicle can be repossessed by the lender.
There are several alternative bad credit short term loans available that may have a far lower interest than other products. These payday loan alternatives often offer lower amounts but have very convenient terms and can pay out your cash quickly.
Most lenders expect you to have a good credit score to borrow money; this is because your credit score reflects how good you are at managing and repaying your credit. Generally speaking: the higher your score is, the more likely you are to be approved for a loan.
Every lender looks at credit reports and scores differently but typically a score of over 700 is considered a good score. A score between 650 and 700 is a fair score, and anything lower than 650 is generally considered a bad credit score.
However, lenders that cater to people looking for short term loans for bad credit often taking into account your ability to be able to repay your loan rather than how high your credit score is.
The amount of credit you have outstanding will affect your credit score. For example, if you have a total credit limit of $5000 and a balance of $4000 your credit utilization would be 80%, which is considered a high amount.
Your history of making repayments on-time will affect your score, sometimes a single missed payment on any credit account could lower your credit score.
Searching for the best payday lender can be time consuming and stressful. Your short term credit could be only two applications away.
We only work with reputable lenders, so we know they are lending responsibly. We’ll search our panel of lenders to find the right loan for you.
We’re a broker not a lender, but we’ll still make sure that the loan is affordable. Even if you don’t have a perfect credit history, we’ll try to help.