Your lender should have a robust and secure website (starting with “https” in the http://rapidloan.net/title-loans-ca url in your browser and a padlock symbol), as well as a physical address. Online lenders may not have physical storefronts you can walk into, but they should still have an address that signifies an office staffed by employees.
1. Secured and unsecured personal loans
Personal loans are either secured or unsecured. To get a secured loan, you need to put up an asset (such as your home or vehicle) as collateral for the loan. When you do this, the bank gets extra reassurance about your application and is more likely to approve you or give you a lower APR – but the risk is you could lose that asset if you fall behind on payments. Unsecured loans don’t require collateral and ounts, but they’re less risky for you as the borrower.
2. Payday loans
Payday loans are short-term, high-cost loans – often for $500 or less. You can get these loans quickly, but the fees and interest rates are exorbitantly high. Payday loans frequently land people in cycles of debt due to often-predatory lending terms. We recommend avoiding payday loans at all costs.
3. Cash advances
Cash advances are short-term cash loans borrowed from the available balance on your credit card. They can be an easy method for fast cash, but the interest rates are often much higher than a credit card’s standard purchase APR or a personal loan APR.
4. Bank agreements
Bank agreements are small loans given out by banks who have existing relationships with customers. If you’re in a bind, your bank may be able to loan you some cash – but keep in mind these policies are not official and the terms and requirements will differ depending on the lender and the applicant’s financial profile.
Home equity loans are fixed-term, fixed-rate loans taken out from the value of your home. These loans are secured by your home equity and may be available to you as a homeowner, even if you have “fair” or “poor” credit. But know that you are taking on additional risk – if you fall behind on payments, your home could go into foreclosure.
6. HELOCs for bad credit
Similar to home equity loans, a home equity line of credit (HELOC) is secured by the value of your home. But with HELOCs, you’re borrowing from a revolving credit line (not unlike a credit card) and can withdraw cash any time you want within the draw period of the line of credit. After the draw period, you’ll enter a repayment period in which you cannot withdraw more cash and must pay back what was borrowed in a certain amount of time. Because of the COVID-19 pandemic, HELOCs have become extremely difficult to get for anyone with less than “good” credit.
7. Student loans for bad credit
Student loans are available to borrowers with “fair” or “poor” credit who are looking to pay for tuition, student living expenses, textbooks, and other learning essentials. You likely won’t be able to take out a personal loan for student expenses, so instead, you’ll need to shop around among specialized student loan lenders.
How to Choose the Best Bad-Credit Loan Company
Having a less-than-perfect credit score can limit your options when it comes to finding a lender, but you should still shop around for the best terms and do your research to make sure you’re working with a reputable lender. Here are some things to look out for:
In general, having a less-than-ideal credit score will disqualify you from getting the best rates, but you should still be mindful of what APRs (Annual Percentage Rate) you’re getting and shop around to get the best deal. Generally, APRs over 40% should be avoided. High APRs may be a sign of a predatory lender and taking loans with high APRs may make it more difficult for you to get out of debt.