Banks vs Online Lenders
Online loans for people with bad credit offer a great financial relief for bad creditors. Because online loans for people with bad credit require no credit check, they are one of the fastest solutions that bad creditors can go for in times of financial troubles.
Before jumping into any of these borrowing opportunities, it is necessary to know what you are really getting into if you apply for online cash advances for people with bad credit. The following most frequently asked questions about online loans for people with bad credit should help educate you on this type of borrowing.
Q:What are loans for people with bad credit?
A:Basically, loans for people with bad credit are designed for bad creditors. Being unsecured, loans for people with bad credit require no credit check and no collateral. In addition, they are small and short-term, usually offering from $100-$2000 and with repayment period of up to two months. Some lenders however offer more than $2000 and some also offer more flexible repayment terms.
Q: How to apply for loans for people with bad credit?
A: There are two ways to apply. One is through banks and other traditional lending institutions such as cooperatives. Second is through online lenders.
Q: What’s the difference between loans for people with bad credit offered by banks and those offered online?
A: Both of them are designed for people with bad credit. The differences are in the following:
1. Approval Time – Any loans offered by banks usually take more than one day. With online lending companies, you can get approval on your loan for people with bad credit application in as fast as 24 hours.
2. Application – The usual bank loan application process entails interviews and submitting of many requirements. With online lenders, there is no need for personal interviews. Some online companies only do phone interviews while others don’t. Moreover, you also do not have to physically file for your application as what you would usually do to get your bank loan application processed. You can send your application online, through the company’s website.
3. Collateral – In most cases bank bad credit loan packages require collateral, as this is their only guarantee that you would pay back your loan. Online lenders of loans for people with bad credit require no collateral and no credit check.
Q:How much is the interest rate for loans for people with bad credit?
A:Because loans for people with bad credit are unsecured, you can expect higher interest rates than regular bank loans. However, while there are hundreds of online lenders offering loans for people with bad credit online, finding a good loan package with low interest rates is possible.
Q:Are loans for people with bad credit good option?
A: Yes and No. If you get one to solve a very urgent financial problem and you have nowhere to go, they could really offer financial relief. However, if you are getting one for non-urgent matters such as buying gifts or to have you dream vacation, getting loans for people with bad credit could become a nightmare.