Bad Credit Loans
You could say that it's right there in the name: Bad credit loans are short term cash loans designed for those who have struggled with credit scores and credit ratings in the past. Such loans could allow people to get the cash they need during a crisis or recover from a disaster even if they may not find credit with more traditional types of loans.
Of course, there is a give and take to this type of loan. In exchange for accepting poor credit, the lenders that offer these loans tend to have additional requirements. Typically, this means more specific terms and conditions to help mitigate the risk. This makes it very important that you pay the loan back exactly according to the repayment plan to avoid the harsh penalties.
Like payday loans and cash advances, applying for a bad credit loan is a quick online process that could lead to new funds within only a business day or too.
What do those requirements look like? They usually include currently having a source of income (often from a job), and making a certain amount of money per month. This amount can vary but is around $800 to $1,000, so qualifying is rarely a concern for those with jobs. Banks may also want to see a checking account in your name, so they have a way to transfer money and automatically collect payments if necessary.
Advantages & Disadvantages
- Allows you to overcome poor credit. Bad credit loans are specifically designed for people who have experienced bankruptcy, foreclosure, bounced checks, late credit card payments, and more. No matter what has happened to your credit in the past, you have an opportunity.
- There are a variety of payment options. Payment could be based on your next paycheck, a credit card with remaining good credit, an installment plan, and more. There could be a number of options based on your needs.
- Not all lenders offer these loans. They can sometimes be difficult to find.
- Low loan amounts. While the amount you can borrow with these loans can vary, it tends to be lower than other loan options. This may make it more difficult to meet your current expenses, so budget carefully if considering bad credit loans.
What Else Should I Know?
If you aren't sure if you could qualify for a bad credit loan or if your credit is in the right place to consider this type of loan, try to compare bad credit loans with cash advances and other options. Note the amounts and terms to see which appears to be the most favorable for your unique situation. If you have further questions, don't hesitate ask lenders directly.