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brightsmith - May 1, 2022
Emergencies and unexpected expenses can arise at any moment. When these times arise, we all look for the security of being able to access the money we need when we need it. Credit plays a big part in how much you can access, but did you know that there are loans for people with bad credit?
It’s true, and Prime Finance Loan Services offers opportunities to access personal loans for those with bad credit to get the money they need. An added benefit to taking out a bad credit loan is that it helps to repair your credit.
Apply Online Today to get started! Learn more about Bad Credit Loans below.
What is a poor or bad credit loan?
A bad credit loan is a great option for those who have what is considered to be poor credit in the eyes of traditional financial institutions like banks and credit unions. A loan for people with bad credit takes into account more than just your credit score.
What is bad credit or poor credit?
Credit is the ability to borrow money or access services with the understanding that you are able to pay later. According to Experian, the top 5 credit score factors are: payment history, amounts owed, credit history length, credit mix, and new credit.
According to Experian, a widely accepted range for a bad credit score is between 300 and 669. This range is often considered by lenders to be “subprime,” which means that this group might have a harder time paying off a loan. Having a credit score in this range often means that there is a demonstrated history of not repaying loans, paying bills late or failing to pay them at all, and other factors.
How can I get a loan with bad credit?
Before getting a personal loan for bad credit, it’s important to know what factors can help you look good to a lender. One key factor that lenders look at is the individual’s stability. If you can show that you’ve lived in the same place or worked at the same job for a number of years, it shows enough stability to consider you further.
When you come to a Prime Finance Loan Services location seeking a bad credit loan, there are some things you should do prior to your visit.
- Start with filling out the loan application online, in-store, or by phone.
- If you are pre-approved, you’ll need the following documentation:
- Picture ID with signature (driver’s license, state issued ID or passport)
- Address verification (Most recent utility bill, water bill, etc)
- Employment and Income Documentation (Most recent paycheck stub)
- You may be asked to provide additional information, including the following:
- Phone numbers of personal references
- Former employer or landlord information
How can I compare bad credit loan options?
When comparing options for a bad credit loan, make sure to evaluate the lender’s loan terms; monthly payment amount, fees & penalties, APR, financing length, and credit terms. It’s important to look for a bad credit loan with a monthly payment that fits within your budget, so you can comfortably repay it and help establish/build your credit for the future.
How bad credit affects getting a loan
Poor credit history makes getting approval for a loan more difficult, however approval for bad credit loans is still attainable. If you are seeking a bad credit loan, you should verify your credit score and shop around for lenders who will take applicants with a minimum credit score lower than yours. If you are having trouble getting approved by lenders, another option is to get someone to co-sign the loan with you, like a friend or family member.
What types of loans can someone with bad credit get?
When it comes to reviewing the types of small loans for bad credit you might come across, there are two that you need to know: secured and unsecured loans. The difference between the two will rely heavily on your goals.
Unsecured bad credit loans
The first is the unsecured loan. An unsecured loan is typically used for the following reasons:
- Refinance high-interest rate debt
- Unforeseen expenses
- Combine other expenses into a single loan or monthly payment
Historically, unsecured bad credit loans will come with a high interest rate and are harder to get approval on, but not impossible.
Secured bad credit loans
The second loan type is the secured loan. A secured loan is usually “secured” by some form of collateral, which can lower the interest rate made available to you. When you choose a secure loan, the collateral you select is put at risk of being lost if are unable to repay the amount borrowed. While these are easier to get, the risk is always there.
Secured vs unsecured loans
Both options are accessible to those with bad credit, but no matter which you choose, it might also help to find a loan type that allows for a co-signer or co-borrower. Think of a co-signer as someone backing you up, saying they’ve got your back. This co-signer should have good credit and by working together, it can drastically reduce the interest rate making payments smaller and terms potentially shorter.
How can I improve my credit score?
In order to be considered a less risky borrower, consider these tips to improve your overall credit score:
- Avoid late payments : If you borrow money, make the payments on or before the due date.
- Pay off any account balances : If you have a balance on anything, pay it off. Any lingering account balances not paid can go into collections. Avoid this by working towards lowering and paying them off.
- Keep accounts open, the older the better : Credit is also based on the age of your accounts. The longer you have an account and show a good history of paying off, the better you look because not only are you showing consistency in payments, you’re showing a trust between you and the account that is open, such as a lender for a bad credit loan.
- Don’t use it all : Just because you quality for $500 doesn’t mean you need to use up all the $500. If you only need $300, use that and that’s it. The ability to show restraint and not max out what you have shows the development of good financial habits that go a long way towards building good credit.
Where can I get a personal loan with bad credit?
If you’re in need of loans for bad credit, our team at Prime Finance Loan Services is here to help. As a lender we aim to not only give you the money you need when you need it, but to also work with you to build your credit through the repayment of the loan.
For over 30 years we’ve helped people across the United States, and when you visit any of our locations, you’ll find a team ready to work with you. You can also apply for a loan online with bad credit, it’s that easy. Let’s start the journey to better financial health together.