If you’ve ever gone to a bank to try to get a loan, you probably realize the difficulty involved in getting approved. Well if you have bad credit, the process is even more difficult and stressful. Due to the high amount of people defaulting on their loans, banks are very hesitant to approve personal loans for people who don’t have a great credit score. Luckily there are alternatives. Poor credit lenders specialize in approving loans for people with bad credit or no credit at all. Choosing one of these lenders is extremely easy with the use of the internet and modern technology. You just have to know what to look for in poor credit lenders and some of the pros and cons of the loans they grant.
Advantages of Poor Credit Lenders
As mentioned earlier, banks are extremely hesitant to grant loans for those with low credit scores. So often time in order to get a loan you will need to seek out lenders who cater to people with low credit scores. And that is essentially the biggest advantage of poor credit lenders; they don’t use your credit score as a major determining factor of whether or not you’ll be approved. Usually, these lenders look at your current income to decide if they feel you will have the ability to repay the loan.
Another advantage of poor credit lenders is that they are willing to approve small loan amounts such as hundreds or a few thousand dollars. This is great for when you need money just for a week or so. If you need money in a hurry, most poor credit lenders offer pay day loans. These are loans that are approved with the promise that the borrower will repay the loan on their next pay day.
Getting these types of loans is really convenient. Poor credit lenders can be found online and the application process can be done online as well which makes everything very quick. Once you find a lender just fill out the application and once you’re approved the funds will be transferred directly to your bank account in 24-48 hours.
Disadvantages of Poor Credit Lenders
Since poor credit lenders provide tons of benefits for borrowers, there are a few downsides to them as well. Since the loans are for people with poor credit scores, they come with higher interest rates than conventional loans. This is understandable however, considering the risk involved in these loans due to the borrower’s credit history. However, if you can pay the loan off, it will help you start to rebuild your credit.
Poor credit lenders usually don’t approve large sums of money either. While this is an advantage in some situations, it can also be considered as a drawback to some borrowers. If you have poor credit and need a loan for a large sum of money, even poor credit lenders will be hesitant to approve the loans for you. If you need a larger loan, you may want to consider getting a cosigner or provide some form of collateral for a secured loan. Poor credit lenders grant secured loans as well. If you’re interest in a secured loan, some common forms of collateral are car titles, house deeds, jewelry, gold, silver, and antiques.
Remember that poor credit lenders are available for those who may have a shaky credit history but are trying to get back on their feet. Take advantage of all the benefits these lenders offer and realize that it’s not impossible to get a loan just because you don’t have a great credit score.