- Repay your loan. Once your lender approves your loan and disburses the funds, it’s time to start repaying your loan. Setting up autopay is a surefire way to never miss a payment.
Loans for Bad Credit Options
When it comes to personal loans, there are two types you can apply for: secured and unsecured loans. However, if you’re having trouble qualifying for a personal loan, consider other loans for bad credit.
Secured Unsecured Bad Credit Personal Loans
Traditional personal loans can either be secured or unsecured. Secured loans require you to provide something of value (also known as collateral), such as your car, savings account or home, to back (or secure) the loan. The lender can repossess the collateral if you fall behind on payments or default. This makes them less risky to a lender, which also means they tend to come with more favorable terms, like lower interest rates, and fewer qualification requirements.
Unsecured loans, on the other hand, are the more common of the two and don’t require any collateral. Because these loans don’t require collateral and therefore pose more risk to lenders, they typically come with more qualification requirements and higher interest rates. The loans on this list are all unsecured personal loans.
Student Loans for Bad Credit
If you’re trying to cover higher education expenses, a student loan for bad credit is likely the direction you want to look. Although private student loans typically require good credit, borrowers with bad credit can take out federal student loans, which don’t require a credit check. Federal loans also come with the most flexible repayment terms, including forgiveness if you work in public service or choose certain repayment plans.
Auto Loans for Bad Credit
An auto loan is a secured loan that uses your car as collateral, which means the lender can repossess your car if you fall behind on payments or default.
Similar to personal loans, auto loan qualification requirements vary for each lender and dealership. While we recommend a minimum credit score of 670 to receive the most favorable terms, you can still qualify for an auto loan with a lower score as long as you meet the debt-to-income (DTI) requirements and bring a larger down payment.
Payday Loans for Bad Credit
Payday loans are short-term, small-dollar loans (usually up to $500) that you repay once you receive your next paycheck, typically two to four weeks after you take out the loan. Many lenders don’t require a credit check, which is often enticing for people with bad credit. However, don’t get your hopes up. Payday loans come with a ton of their own risks and sky-high fees. Consider other alternatives first, like personal loans or borrowing money from friends and family.
If you have enough equity in your home-your home’s current market value minus your remaining mortgage balance-you may be able to get a home equity loan or home equity line of credit (HELOC). Both let you draw against your home, which means your home secures the transaction and the lender can repossess it if you fail to repay. However, home equity loans are disbursed as lump-sum amounts while HELOCs limit you to withdraw funds on an as-needed basis.
But it’s unlikely borrowers with bad credit scores can qualify for these loans. Most traditional lenders require minimum scores between 600 and 620. There might be a specialty lender or credit union that will make https://rapidloan.net/title-loans-ct/ an exception, but it’s not common. People with scores less than 600 would have to go through hard money lenders, such as private investors or companies, not a bank. While hard money lenders are more flexible, they’re typically a more expensive route.
- Offers direct lender payoff for debt consolidation loans
To expand eligibility, Avant also will consider more than just your employment income, including alimony and child support, and may include the income of other people within your household. That said, Avant does not allow co-signers or co-applicants.
Upstart also offers a pretty flexible range of loan options, with amounts ranging from as low as $1,000 so you don’t have to borrow (or pay interest on) more than you really need. And, while Upstart’s loans cap out at $50,000-lower than some lenders-this is likely to be enough for many prospective borrowers.
- Submit your application. Once you’ve found the best lender for your situation, submit an application online or in person. Prepare to provide your personal information, such as your Social Security number (SSN), address and income information.
