If you have been playing fast and loose with paying your bills and debt repayments, it can have a negative effect on your credit score. This may then make it difficult to get a personal loan at an affordable interest rate. If you find yourself in dire need of cash and you are searching for a bad credit loan, there are some things that you need to keep in mind.
Remember the Bank
If you have a low credit score, don’t assume that you won’t be able to get a low-interest loan at a prime lender, especially if you already have a relationship with an institution. Take your credit report and do some shopping.
There may be many banks and credit unions willing to offer you a personal loan without having to pay sky-high interests and fees. In fact, when you need to get a loan with a low credit score, consider community banks and credit unions first, as other institutions may charge you anything north of 30%.
Payday Loans
If you are in short-term need of cash, consider getting a payday loan. Even with critics, the payday industry is still growing at a rapid rate. Payday lending may be one of the best ways to get cash if you have an emergency. It’s also one of the simplest, especially if you have a job, a bank account, and proper identification. If you need anything from $100 to $500, the borrower will authorize you with the amount that you need plus the fee which is usually 15%. You then pay the full amount back when you receive your next paycheck.
Very few banks offer payday loans to their clients due to the high transaction fees. If you are considering a payday loan, make sure that you make use of a legitimate payday lender that discloses their loan terms and conditions as well as the dollar amount of their fees. These types of loans are handy if you run into unexpected expenses like automotive repairs or a high veterinarian bill.
Improve your Credit Report
According to federal law, consumer credit reporting agencies have to send you a copy of your credit report and credit score once a year. These two things have a significant influence on what you can qualify for in terms of loan amounts, interests, and fees. If you are looking for a long-term loan, it may be worth your while to take an extensive look at your credit report and identify errors. By identifying these errors and correcting them, you will be able to improve your credit score as well as your credit report. An example of a remedial action is to save more money and to pay your bills on time.
Read the Fine Print
Whenever you receive a solicitation or offer for a personal loan, it is incredibly important to read every single word on the offer. Many times, the low-interest rate that is boldly brought under your attention is the starting point. In the fine print, you may see that this interest can go much higher. Lenders can also charge an origination fee that can be as high as 6% of the value of the loan amount.
Do Research
If you are considering getting a loan from a lender, it is important that you spend some time researching the company. In particular, check for complaints with the Consumer Financial Protection Bureau. You can also search the company on regular consumer sites, as well as their reviews on other platforms to see how other people experienced the company.
When you are in a financial crisis, it can be easy to ignore research to get the cash as fast as possible. It can, however, cost you more in the long run. If you have a bad credit score, you should make sure that any loan offer at a low-interest rate is legitimate and that the company that offers you the loan is reputable.
