Four Great Tips
Getting approved for the best loan is challenging, if not impossible, when you have bad credit. Traditional lenders like banks would likely deny you of low-interest loans which they reserve only for those who have an established creditworthiness. This does not mean though that all the options left for you are bad. Here are some tips to landing on a not so bad financial solution when you have bad credit.
Assess Your Financial Needs
How much money do you actually need? Your answer to this question will help guide you on the type of loan you should be getting. If you only need a small amount to go through a financial trouble, then you might want to consider short-term loans such as payday loans or cash advances. If you need a bigger amount of money, then you should consider long-term loans that you can pay in installment basis.
Assess Your Capacity to Pay
You’ll get yourself in big financial trouble if you take this tip for granted. Before you take any loan, you should first assess whether the loan you are getting fits your financial situation. Does the lender offer a more flexible term that you need to pay your loan off? Will you have the money to pay for your loan when the due comes?
Know Your Options
Know that even if you have bad credit, you still have good loan options to choose from. You may have the option to borrow from credit unions which generally charge lower interest rates than other types of unsecured loans for people with bad credit.
If you are unable to get unsecured loans, you may also opt for secured or collateral-based loans. Many lenders are willing to work with you if you can offer this security to them. Collateral-based loans are also a perfect solution if you are looking for a bigger amount of money and are looking for a longer and more flexible repayment term.
If you need a short-term solution just to get by until your next paycheck arrives, there’s payday loans for you. Payday loans, also called cash advances, are short-term loans that offer from $100 t0 $1500 and these loans are paid back on your next payday. This loan is designed for small financial emergencies in between your paydays, such as your car broke down and other unexpected expenses.
Know Where to Get Loans for People with Bad Credit
There are many sources of loans for people with bad credit. For secured loans, you can go to banks which are known for their interest rates. For unsecured loans though, you can go to your local lender or online, depending on the type of loan you are getting. For car title loans, personal application may be necessary as you will also need to take your car to your lender for assessment. Meanwhile, payday loans may be conveniently taken out online through your lender’s website.
What’s important to remember, though, regardless of the type of loan you are getting is to only deal with a legitimate and reputable lender. Always check for feedback or complaints regarding your lender and make sure that they are accredited. This should prevent you from falling into predatory, if no scam lending companies.