Your credit report or credit rating is viewed as your credit worthiness simply because this rating reflects how good you are as a borrower. Needless to say, if you have a bad credit rating (scores below 600), you have a history of defaulting on your loan repayment. Thus, loan lenders consider people with bad credit as high risk; and this is why if you have a bad credit rating or history, chances are you would have a hard time taking out regular loans from traditional lending institutions such as banks. But thanks to the online lending industry which is offering loans for people with bad credit, now it is possible for bad creditors to obtain a loan anytime the need arises.
Online Loans for People with Bad Credit Defined
Traditional lending institutions such as banks also do offer loans for people with bad credit. However, the type of loan they offer are secured loans, which require collateral in the form of assets like real estate properties, jewelry or car, apart from other requirements. Thus, if you cannot present collateral, chances are your loan application wouldn’t get approved.
Online lending institutions have made loans for people with bad credit now easier to obtain and possible, as these institutions do not require collateral. Online loans for people with bad credit are especially designed for people with low score or no history but have the capacity to pay for the loan.
The best thing about online loans for people with bad credit is that they are easy to obtain. No need to physically appear before loan agents and go through embarrassing loan interviews, as you can obtain loans for people with bad credit online, from the comforts of your own home. This means you also do not have to take a day leave from work just to get your loan application processed.
Obviously because online loans for people with bad credit are designed for bad creditors, lenders require no credit check for this type of loan.
In addition, online loans for people with bad credit are usually short-term small loans. Depending on the lender, the repayment period range from days to two months. If you are taking out payday loan, you will have to pay back the loan plus interest on your next payday.
As mentioned, online loans for people with bad credit are small loans, offering $100 to $2000. The amount you can borrow usually depends on how much you earn. And as unsecured loans, expect higher interest rates for cash advances for people with bad credit.
How to Qualify for Online Loans for People with Bad Credit
The eligibility requirements for online loans for people with bad credit are very minimal. The basic requirements are as follows:
1. Proof of income, such as pay slip or pay check
2. Proof of address, such as utility bills
3. Proof of age such as your birth certificate. You should be of legal age to obtain the loan.
4. IDs such as your employment ID, driver’s license or social security card
5. A valid bank account which where the lender will deposit your loan into.