Obtaining loans when you have bad credit score can be tricky, however there are some lenders with transparent rates and fees and flexible terms and are willing to consider other things more than just credit scores. While most of these lenders are good and ready to assist you, some are predatory lenders while others are scams that can keep you in a cycle of debt.
Still, it is important to note that credit score greatly affects the way banks perceive your ability to pay them back. To lessen their risk, lenders often cap your loan and may even request collateral for you to secure a loan. At times you will find interest rates for bad credit loans to be as high as 20% but some companies that offer online loans can provide you with a much better deal. You have to be certain that you can pay these rates and that you don’t have any better options.
Cash Loan Option
There are a number of companies that specialize in lending to customers who may have some blemishes on their credit reports. You can literally get a loan from your home or office. Small loans or no fax payday loans are very simple to get if you need cash for a short time. Bad credit score means different things to these lenders. Some traditional lenders are unlikely to consider you applications if you credit score is below a certain limit while others use credit limits as a smaller part of their decision making and are may consider you application even if you credit limit is even below 600. Among the most popular bad credit loan providers for quick cash loans can be found online.
Consider A Debt Consolidation Loan
One of the options of organizing and streamlining your bills is debt consolidation. This allows you to consolidate several debts into a single loan with lower interest rate and longer payment term, which allows you to pay lesser each month to a single lender. Loan consolidation is a good option for people who seriously want to change their spending habits and are committed to paying their debt off.
Auto Loans for Bad Credit
Obtaining a car loan with bad credit is not an enjoyable experience. You may find yourself locked out of certain deals offered to those with good credit records with lower interest rare if your credit score is below a certain limit. Since car loans are relatively small and a secure with collateral, auto loans for bad credit are easier to obtain than other loans. Research shows that the average interest on a subprime car loan for those credit score between 500 and 600 rose from 10.57% in mid-2014 to 10.91% by mid-2015. Those with bed credit below 500 are even steeper: it rose from 13.16% to 14.51%.
Title Loans (Automobile, RV, Boat, or Motorcycle)
A title loan, normally called pink slip loan, is a loan in which the borrower’s property such as a vehicle is used as collateral against the debt. The amount you can obtain depends on the value of the property and is usually capped at about 50% of the value of the vehicle. The interest rates for these kinds of loans are typically much higher than those on traditional bank loans. They often charge has high as 300% to 650%.
The owner of the property to be used for collateral must own the property free and clear and should be able to present a lien-free title to the lender. Other may require paper work, which include valid I.D. property registration, proof of insurance where applicable, and proof of income.
Most people who seek for the title loans do so when they have urgent need for cash and believe their option for raising it are limited. Title loans such as car, motorcycle, RV, or boat title loans are very expensive as compared to other loans and those who are unable to repay the loan are likely to lose their properties. It is therefore important for the potential borrowers to research for alternative before obtaining a title loan.