It’s not a secret that a bad credit score can limit your ability to borrow money. It might be harder to get a quick cash loan with bad credit, but it’s not impossible. There are lenders who provide cash loans even if you have bad credit.
Unsecured loans are a personal loan that can help you out of a sticky financial situation. There are personal loans available in a wide range of dollar amounts, and they are available to individuals of every credit score. While those with excellent credit scores will have the most options when it comes to borrowing money, there are still many ways to secure your own payday loan if your credit is less than stellar.
Cash Loans For Bad Credit
A cash loan for bad credit is an unsecured loan. That means that there is no collateral required. You don’t have to tie the loan to an item purchased but can instead use your cash loan to pay off debts, cover repairs to your vehicle, improve your living situation, buying appliances when your old one breaks or covering emergency expenses.
The bad credit loans is treated the same way as any other personal loan. You will borrow the money from the lender following an application and approval process. Then you will be given repayment terms. You will need to pay the money back in fixed monthly installments until you’ve completely repaid the loan amount.
Loans, Credit, and Interest Rates
The biggest difference between cash loans for those with good credit and cash loans for those with bad credit is the interest rate charged on the loan. The lower the credit score, the higher the interest rate tends to be. The interest rate is not only the bank’s profit on the loan they are offering borrowers, but also the measure of risk. In short, the more a bank feel’s like they are gambling on a borrower, the higher the interest rate tends to be.
Fortunately, even if you have bad credit, a cash loan doesn’t have to mean you are stuck with outrageous interest rates. There are many other lenders out there besides traditional banks. Thinking beyond the traditional bank loan often means you can arrange more favorable terms, lower interest rates, faster approvals and improve your credit as you repay this loan to better prepare you for the next.
There are many different lenders available when you are looking for a personal loan. If you’ve only considered the traditional bank, you might be limiting yourself when it comes to finding the best ways to get cash when you need it.
- Credit unions. A credit union operates in ways similar to a bank, but isn’t owned by a company. Instead it’s a collective savings and borrowing community. The maximum interest rate you will see from a credit union is 18 percent.
- Peer-to-peer lending. There are communities of borrowers and lenders all over the world, and you can access these communities through the internet. Peer-to-peer lending cuts out the middlemen of banks or credit unions and offers cash loans with favorable terms from individuals willing to work with other individuals.
- Payday loans. If you need a short term loan, especially if you know you have an extra paycheck or bonus pay coming, a payday loan is a very quick way to get that cash in hand when you need it, without waiting the few extra weeks for the payment cycle to process at your job.
- Home equity loans. If you own your own home or you’ve been making payments on your home for years, you may have enough equity built up in the home to quality for a home equity loan. This is not a traditional cash loan however and is secured through collateral – your home. If you fail to make payments, you can lose your home through a home equity loan.
There are other ways to get fast cash in hand like borrowing from your own retirement accounts or even selling your own valuables, but these are often not the best choice for borrowing, especially when there are so many other options available online for cash loans.
Your credit score is a numerical measure of how likely you are to pay back money you borrow. That’s why a low score can make it much harder to borrow money because that low number makes you look riskier to traditional lenders.
Credit scores range from 300 to 850. The higher your score, the more positive experience you have with borrowing and repaying loans. There are loosely interpreted brackets of scores that reflect credit history. These are hard to pinpoint exactly as different lenders view scores differently.
A very good or excellent score is a credit score higher than 720. A good credit score sits between 680 and 720, and a fair or moderate score falls between 650 and 680. Scores below 650 are bad credit scores. There is some flexibility in how lenders interpret scores. A 650 for one lender may be considered a bad score, but others are willing to consider borrowers with scores closer to 620 or 600.
Finding a Cash Loan with Bad Credit
It is important to shop around and look at the options available to you. The internet makes it easy to find the many borrowing options, compare them, and then choose the terms that suit your needs. If you have a score that falls below 650, you are a great candidate for bad credit loans, especially those options from places other than traditional banks.
If you have a low credit score and need cash, your first option may be to wait. Over time, making regular payments on other loans can improve your credit score. But for many people looking for a cash loan with bad credit, there is not time to wait for credit scores to improve. Financial emergencies don’t care about rebuilding credit. They must be addressed.
Fortunately, you have options for borrowing money with bad credit. Best of all, you can easily access all the best options for bad credit loans online, which makes it easy to shop around and find the best loan for your situation. Online you can compare terms from credit unions, peer lending services, payday loans, specialized banking offers and online lenders who specialize in personal loans.
If you need funds, you are already working on ways to get cash in hand. But there are additional benefits to arranging a cash loan when you have bad credit.
- You can get money quickly. You will research and apply for loans online. The approval process is fast and cash arrives in your account with minimal delays. With e-signatures and direct deposit, you are able to skip over the more tedious aspects of loan applications and move the process along quickly.
- Interest rates can be more favorable. If you do a bit of loan shopping, you can easily find a personal loan for bad credit that has better interest rates than a traditional bank might offer, and certainly lower than a credit card would have.
- More lender options to choose from. Going to the bank for a loan removes any choice you might have. Shopping for lenders online, even having them compete for your business, provides choices and much more favorable terms. You may even discover lending options you didn’t know existed, which can make the experience less stressful.
- Better repayment terms. The longer the loan length, the smaller the monthly payments will be when it is time to repay the loan. If you are working with a variety of lenders to look at terms and loan options, you will have choices about how quickly you must repay the loan. Pay it quickly and clear the debt or take more time and make the repayment fit more easily into your current budget.
- Improve your credit score. A low credit score limits your borrowing options. Fortunately there are several options for borrowing a loan, even with bad credit. But you will always have even more options with a good credit score. One important benefit of arranging a bad credit cash loan is that the loan will actually improve your credit score. Open the loan, make timely payments and every month your credit score will rise as you demonstrate that you are borrowing money and repaying it wisely.
Cash loans are available for all borrowers. Have no credit? Bad credit? Cash loans are still an option. Emergency expenses are stressful enough – borrowing the money to help resolve the issues shouldn’t add to the problem. It should help solve it. With hundreds, maybe thousands, of online lenders willing to work with all sorts of borrowers, you can easily find the cash loan you need with terms that work for you.