Americans regularly use every type of personal loan for a large variety of financial challenges. Whether it’s paying for a new home, a wedding, or...
Having good credit is something most people don’t think about until the time comes when they need a loan. Whether it’s a mortgage on a new home, a student loan, or a loan to pay off medical expenses, loans are a fact of life for almost everyone and having good credit can help you obtain one.
If your credit isn’t in the best shape or if you’re working on building your credit from nothing, don’t despair! There are financial solutions for just about anyone.
Having “bad credit” means having a credit score that falls below 500 and can make acquiring a loan a challenge since lenders view you as a riskier borrower. The good news is, there are still plenty of loans for people with bad credit, it just takes a bit more time and effort.
Even with bad credit, you can still qualify for all kinds of loans — personal loans or otherwise. Just be prepared to spend more time researching so you aren’t stuck with the bottom of the barrel when it comes to loan terms and rates.
One example of a bad credit loan to avoid is a payday loan. This is a short-term, small amount loan that provides quick cash but incredibly high-interest rates — sometimes as high as 400%. This option can be tempting because virtually anyone can get approved, including those with the lowest of credit scores.
It’s highly advisable to pass on these types of predatory loans, as there are plenty of loans available from reputable lenders with more reasonable interest rates. Sure, your APR may be much higher than if you had good credit, but they won’t be as high as payday loans or similar cash advance loans that target those with poor credit.
So how do you get a personal loan with bad credit or get a loan with no credit at all? The key is to put in the time to research your options. Gone are the days when consumers were limited to traditional brick-and-mortar banks and credit unions.
In today’s digital age, there’s a wealth of online lenders to choose from when it comes to finding and comparing loans. Just prepare yourself—having poor credit means you won’t qualify for all of them, and those you do qualify for will come with a higher APR.
If you’re having trouble getting approved or finding a comfortable interest rate, here are a few ways you can get approved for loans with bad credit:
If you have a friend, spouse, or close family member with good credit, having them cosign on your loan can make a difference in whether or not you get approved. Additionally, having a trustworthy cosigner can also snag you a better interest rate on your loan.
Try using an online personal loan marketplace. These platforms are free to use and they work with reputable lenders. You can see if you qualify for a loan in a matter of minutes after providing a few details about yourself and your financial profile. From there, they’ll run a soft credit check which won’t harm your credit score, and you can then compare rates from lenders you qualify for.
If you’re unsure where to start in your search for loans with no credit or loans with bad credit, there are many reputable lenders and marketplaces that cater specifically to those with poor credit or no credit at all. These lenders will view not only your credit score but your entire financial profile for the approval process. Determining creditworthiness includes your debt-to-income ratio, your income, job stability, and other factors.
LoansUnder36 is a free online loan marketplace that connects borrowers to lenders who offer loans under 36% ARP as fast as the next business day. They cater to those with all credit scores and loans range from $500 to $35,000.
Bad Credit Loans
As its name suggests, Bad Credit Loans is an online lender offering loans up to $5,000 to those with bad credit. It’s safe and secure, has a fast online process, approves loans as soon as the next business day, and best of all, all credit types are welcome.
Monevo is another online marketplace lender that allows borrowers to quickly compare personal loan offers from lenders they qualify for with just one application and a soft credit pull. Similar to our other recommendations, Monevo is a great place to start when shopping for a personal loan with bad credit because they consider an applicant’s entire financial profile rather than just their credit score.
Upgrade is an online lender offering loans up to $50,000. There’s no credit score minimum to apply and submitting a quick pre-approval form won’t impact your credit score. You can get a decision in seconds and have money sent to your bank account within a day.
When comparing lenders for bad credit score loans, the first thing you want to check for is if there is a credit score minimum. You can save yourself time by only applying for loans that do not require any minimum. You also, ideally, want to select a lender that offers flexible terms, which includes factors such as repayment fees, the length of the loan, and so on.
Additionally, it’s important to pay attention to the APR as opposed to the interest rate. APR will include any hidden fees that may be involved when securing a loan from a lender so you can have a better idea of what you’ll be paying.
This is where marketplace lenders come in handy. You only have to submit one form to view offers from multiple lenders, making it easy to compare rates and terms.
If you aren’t satisfied with the bad credit loan terms you’re receiving from lenders you qualify for, it’s time to start working on improving your credit score. Even if you need a loan fast and ultimately decide to opt for a high-interest loan today, getting started on boosting your credit score now can help you earn better loan rates or even refinance your loan in the future.
Here are a few ways you can improve your credit score:
Searching for the best personal loan with satisfactory rates and loan terms will always require work, whether you have excellent credit or bad credit. If you have a little time on your side, start researching the various lenders out there—whether it’s a traditional bank, credit union, or online lender. While many lending institutions place a heavy emphasis on one’s credit score, there are just as many who look at other factors when making a decision.
If you need a loan fast but aren’t happy with the rates you’re seeing, try adding a cosigner to give you a boost, or even applying for a secured loan if you have a valuable asset to back it up. And remember, it’s never too late to start improving your credit score. You can build it up faster than you think, and doing so will open the doors to much better loan rates in the future.