People with low credit ratings often have a difficult time getting a loan because they’re viewed as high-risk customers who are more likely to default on a loan. Fortunately, there are lending options available that can get you the money you need, and some can help you raise your credit score if you make your monthly payments and pay off the loan in full. Here are three options to consider:
1. Payday Loan and Installment Loan Lenders
Payday loans or cash advances are short-term loans that can be used to help you bridge the gap between paychecks or help pay an unexpected expense like car repairs. The main requirements for a payday loan are a source of income and a checking account. Lenders like LendNation work with you to determine a funding amount you qualify for and a means by which to pay back the loan.
For example, when you get loan approval with a payday lender, as part of the process you set up an automatic withdrawal to pay back the loan by the due date – often your next paycheck, or about two to four weeks.
The best aspects of a payday loan from lenders like LendNation are the wide range of ways to apply for a payday loan such as online or in-store, the quick approval process, and acceptance of low credit scores. You can come in and meet with our friendly staff or you can apply right from the comfort of your home.
You should take some precautions when taking out any loan. The rates should be transparent and clearly visible online or in-store. You shouldn’t have to pay an up-front fee to apply for or get a loan either. A lender who is licensed in the state is the best option for securing a loan.
There is also another type of loan called an installment loan, where you borrow money and pay it back in set amounts over a certain period of time – much like a typical personal loan. The funding amounts are typically higher than payday loans, giving you the ability to borrow more. At LendNation, we offer two types of installment loans.
- Standard Installment Loan: This is a type of unsecured loan that allows you to borrow funding into the thousands of dollars, depending on the state in which you live. Because it is unsecured, it typically has a bit of a higher interest rate.
- Title-Secured Installment Loan: This installment loan also lets you borrow into the thousands of dollars, and uses your vehicle’s title as backing to the loan, which means your interest rate is typically lower. And you get to keep your car.
2. Low Credit Lenders
While getting a loan with less-than-perfect credit can seem impossible, there are some lenders who will work with you – both local and national lenders – like LendNation. Not only do we work with those who have less-than-perfect credit, but we do so with honesty and respect. Plus, we have a wide-range of loan options with varying loan amounts, from payday loans to installment loans to title-secured installment loans.
AAA Credit Guide has some helpful advice for low-credit loans and choosing a lender.
Choose transparent and secure lenders. Two of the most important deciding factors when selecting a lender is that they remain transparent about costs and fees throughout the process and that they offer a secure way to apply for a loan. But before even getting started, make sure the lender is licensed to do business in your state.
Research what to expect with the low credit loan. For most low credit loans, you should expect a higher interest rate and for the funding limits to be lower. You may also be asked to provide collateral, something of value to guarantee the loan is paid back, for the loan.
3. Debt Consolidation Lenders
If the reason you need a loan is because you have significant debt, a debt consolidation loan might be your best option. Credit.com defines debt consolidation loans as a loan that pays off your various types of debt, such as credit cards, personal loans or medical bills. You can then focus on paying off one single loan – the debt consolidation loan.
The benefits of debt consolidation include flexible payment schedules, simplified budgeting, discontinued calls from collection agencies, and a potential boost to your credit score with on-time, consistent payments. It’s important to note, though, that you may face higher rates with a lower credit score.
The amount you can borrow with a debt consolidation loan can vary, but some lenders may fund up to $35,000. Payment terms also vary from a year to five years, so you can work with them to determine the best pay-back schedule for you. Double check that there are no hidden fees or prepayment penalties for paying off the loan early.
Having a low credit score does not automatically write you off for loan approval. There are lenders out there who will help you meet your financial needs – like LendNation! Take some time to continue researching your options and you’ll find a solution that’s right for you. Reach out to LendNation at 866-324-9565 for any questions regarding title, installment or payday loans or visit a store near you today!