If you have gone through a tough financial situation that left your credit damaged and now you find you need a loan, instead of feeling defeated you need to know that bad credit loans do exist. As with any loan, the key in taking out a loan specifically designed for someone with bad credit is to conduct research to find the lowest interest and best terms. Now, interest on a loan of this type is going to be higher than interest on standard loans but again, spending time to look around would help locate the bank or financial institution that would serve your needs best.
Unfortunately, millions of people have bad credit for one reason or another. A person’s credit score could be damaged from a divorce, death of a spouse, loss of job, unexpected illness, or injury, and even mismanagement of money. More than likely you have found yourself needing a bad credit loan because of a situation out of your control. Although the initial financial crisis may not have been your fault, some good can come from this experience by learning things to avoid, as well as better ways of protection for the future.
Although bad credit loans are formulated to help with multiple needs, most people look for a lender that can provide a personal loan, home loan, or car loan. The first stop would be your own bank or credit union. Today, it is common for banks to offer different types of bad credit loans and while qualification may be somewhat challenging, going this route usually means paying less in interest than a lender online. However, if the financial situation is serious and you desperately need a bad credit loan but do not qualify with a traditional lender, you may find the only option is through a lender via the internet.
Because interest and terms vary dramatically, it would be essential to make close comparisons before locking into a contract. The following are a few of the lenders online now offering loans for people with less than perfect credit. These lenders offer unsecured personal regardless of how the money would be spent.
- FaxFreeCash – This lender can secure loans up to $25,000 although this amount takes several days to process. However, $1,500 can be approved and in your bank account within an hour. The online application process is secure and loans are approved without any paperwork.
- NetloanUSA – Rated as the largest lender for cash loans on the internet, this company also provides up to $1,500 in cash within one hour of being approved. Compared to other lenders of bad credit loans, this lender approves four out of five applicants no matter the credit history.
Car and Bad Credit Mortgages
If needing a bad credit loan to catch up on car or house payments, or to make necessary repairs, the lenders below are considered among the best for online services.
- DriveTime – In addition to providing the money needed, this particular lender reports to all three credit bureaus so as payments on the bad credit loan are paid on time, your credit score would improve. Regardless if your credit history shows a bankruptcy, judgment, or some other negative report, loans are possible and approval comes in less than two minutes.
- Loan Modification – One of the best ways of becoming current on mortgage payments to avoid foreclosure is with a home modification loan. In this case, the lender offers lower interest, changes the type of interest from adjustable to fixed, reduces the amount of the original loan principal, waives late fees and other penalties, etc. Although slightly different from a traditional bad credit loan, modifications have proven helpful to many homeowners.
We wanted to mention two important things about bad credit loans. First, while the payday loan industry is worth billions, interest is outrageous, often 100% to 400%. Although these loans could be helpful in certain situations, most financial experts discourage people to consider other options for a bad credit loan. In fact, because of the high interest and poor business practices, many states now ban payday loans.
Second, during the time you use the money from a bad credit loan to take care of financial obligations, be sure to order copies of your credit report from all three credit bureaus. That way, you could improve your credit score by paying the bad credit loan payments on time but also researching errors or problems showing on your credit report.
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