Getting a best pay day loan is never easy. But finding one with the best possible terms and conditions can be even harder when you have bad credit, especially if you want to borrow more than $1000. The good news is that there are still loans available for people with poor credit scores. We’ll show you how to find them.
If your credit score is low then it’s probably fair to assume that you’re not going to get a bank or credit card loan. This means that you’re unlikely to be able to shop around for the lowest rates on personal loans. You might be able to get the best payday loan from a broker, but these generally come at higher interest rates.
So what other options do you have? If you don’t meet the criteria for a bank loan or credit card, then you may have to look into personal loans. These aren’t loans that you take out against an asset such as your house or car though. Instead they’re simply short-term loans of between $1,000 – $5,000 which you pay back over time.
You will need to make sure that you qualify for this kind of loan before applying for one. So here we’ve compiled some tips so that you can ensure that you get approved for a personal loan despite having bad credit.
Tips for Finding the Best Loan for Your Situation
The first thing you need to consider is exactly why you need the money in the first place. It’s important to understand whether you really need to borrow the money or if you could wait until you have enough saved up in order to buy the goods you need.
Once you know this, it becomes easier to decide on the right type of loan for your needs. Here are some things to think about:
- Is your situation temporary or permanent?
- Do you need the money quickly or do you need it later on?
- What amount of money do you require?
- Is it a one-off payment or do you need to borrow again later on?
These questions should help you to decide on the best kind of loan to apply for. Depending on your answers, you may need a secured loan, an unsecured loan, or a line of credit.
Secured vs Unsecured Loans
If you need fast access to funds then you will need to choose a secured loan. Secured loans are those where you put something of value up as collateral against them. This includes anything like your home, car, business inventory, etc.
In most cases, you will be asked to provide evidence of ownership such as proof of title deeds or copies of your sales tax receipts.
It’s worth noting that secured loans are also known as “collateral loans”. In case you need to repay the loan and default, you will lose your collateral as security.
Unsecured loans are those that don’t require any form of collateral. They can be used for anything from paying off bills to buying new equipment.
Line Of Credit Or Revolving Line Of Credit (RLOC)
A line of credit or revolving line of credit allows you to borrow money for smaller amounts on a regular basis. Typically, it allows you to borrow up to a certain amount each month that you repay over a set period. There are two main types of line of credit:
Revolving line of credit –
A revolving line of credit is a revolving account that you can use whenever you wish. When you use the line of credit, you will be given an advance by the lender that you can use to spend however you please.
Fixed line of credit –
A fixed line of credit is more similar to a traditional loan. You will be required to pay back the full amount every month, but you can only use the money when you want to.
When comparing secured loans to unsecured loans, you should bear in mind that the latter won’t offer any protection if you default on the loan. However, you should also consider the fact that secured loans tend to carry higher interest rates.
Banks usually charge high interest rates on secured loans because they are assuming all the risk involved. The borrower has no guarantee that he or she will ever receive their property back. Therefore, when you are looking for a loan, make sure that the lender doesn’t ask for collateral before agreeing to lend you the money.
One option that you might consider is to apply for a payday loan. Most payday lenders will offer you very attractive deals if you have a bad credit record. But be aware that there are risks involved with taking out a payday loan. For example, you could end up owing more than you borrowed.
This is due to the fact that you are using your next paycheck to cover the cost of borrowing. As soon as your next paycheck arrives, the debt will be added to your balance and you will start paying interest immediately.
If you’re thinking about taking out a payday loan, then you should be aware of the following:
Interest rates tend to be much higher than the interest rates charged by banks and credit unions.
Many payday lenders are regulated by a state agency called the Department of Financial Services. These agencies typically have a list of prohibited activities including:
- Loan sharking
- Offering loans to borrowers who cannot afford to repay the money
- Making false promises about repayment
- Charging excessive fees
- Paying cash advances without permission
- Some states prohibit payday lenders altogether, while others allow them to operate under certain restrictions.
- Finding Low Interest Loans Online
Today, there are many online lenders that specialize in offering low-interest-rate loans to people with bad credit. Some of these companies will even waive all processing fees if you are approved for a loan.
To find a reputable company like this, you’ll need to research the various lenders that you’re considering. You should try to find reviews of their service as well.
For instance, you should check out the Better Business Bureau website to see what complaints you may encounter if you go ahead and apply for a loan through them. Also, be sure to look out for negative comments regarding the financial institutions themselves rather than the specific loans they offer.
There are several reputable online lenders that offer low interest loans to people with bad credit. One of the best places to start is LendUp.
LendUp is a peer-to-peer marketplace that connects borrowers with lenders. Borrowers post their requirements on LendUp and lenders bid on the requirement. Once you have found a suitable offer, you submit the details of your application to the lender and then wait for approval.
If you get pre-approved for a loan before you apply, then it makes the whole process quicker and less stressful. Plus, if you choose a lender that offers the deal you were hoping for, then you won’t have to worry about wasting your time trying to get approved elsewhere.
To get started, you should sign up for an account and log in. Then, browse through the listings to find the loan that you’d like to apply for. When you find one that you’re interested in, click on the link underneath it to read more information.
Underneath the listing, you will find a small description of the loan, along with the exact amount that you will have to repay. After this, you will need to fill out your personal information.
After completing the application, you will be provided with a few different options for the lender to contact you with. If you prefer, you can opt to send them an email instead.
As long as you complete your application within 24 hours, you should hear back from the lender within the same day. If you don’t, then you will need to give them another call.
It’s also crucial that you keep in touch with the lender. If you get approved for a low interest loan and you don’t follow up on your payments, then the lender will begin charging you interest and penalties.
Before signing any agreements, always make sure that you read through everything carefully. Don’t just agree to whatever the lender asks – read through the fine print to make sure that you understand all of the terms.
Finally, if you decide to apply for a loan, make sure that you save your receipt so that you can prove when you paid the money back. You should keep this document safe until the loan expires. This way, you can easily prove that you did indeed pay it back.
Low interest loans can be useful if you need the money now but you don’t have a lot of savings. By shopping around, you can find a company that offers the best deal for you. Remember, though, to always read the fine print so that you don’t end up getting trapped in a cycle of debt.
Be sure that if you take loans with bad credit scores the loan might increase with interest rates into play and you might end up paying many times higher if make the payment late. This might result in more trouble for you also try to read fully the lender’s guidelines if he is not cheating you as there are many such cheats available in the market of lending and borrowing.