Our finances are one of the most important aspects of our lives. Without good financial management, you’re bound to fail financially. And one of the cores of our financial lives is our credit score.
With a good credit score, you’ll easily get approved for most market loans, personal loans, lines of credit, and even business loans.
But what if you have a poor credit score?
You’ll find it hard to get approved for a traditional loan. Not to mention that if you get approved for a loan, the repayment terms will be much harder to fulfill, and your interest rates will soar.
But if you’ve been researching which loan to get if you have a bad credit score, you might’ve already heard about bad credit loans.
What are Bad Credit Loans?
When lenders receive applications for loans, they typically review your credit score and check your credit report and overall creditworthiness for consideration. If you meet their requirements, they will make a loan product specifically tailored to your financial needs or offer you one of the loan products they have.
With this process, it'll be hard for people with bad credit since getting a regular loan is practically impossible. However, there are some lenders out there who are willing to cater to people with bad credit, such as CreditNinja no credit check required. These are called bad credit loans, which are more tailored for people with bad credit.
In addition, bad credit loans generally have a fixed rate, but the rates are usually higher than regular loans. But bad credit loans are just a general term. Different types of loans can cater to people with bad credit.
Here are some of them.
Home Equity Loans
If you’ve been paying your mortgage for a while now, your current equity might be quite significant. If you think so, you can take out a loan from the equity you’ve built from your house.
These loans have fixed rates and can typically be paid for at least 30 years, depending on the amount of money you borrowed. Since it’s your equity, the credit check isn’t as strict as your regular loans, making it ideal if you’re willing to get it.
Keep in mind, however, that if you can’t pay this loan, your equity might be in danger, or worse, your house will be repossessed.
Home Equity Line of Credit
If you aren’t a fan of loans, it might be interesting to know that you can also take out a loan of credit from your equity.
The lender will give you a balance you can borrow from whenever. However, in this one, you can pay off the money you borrowed from your balance usually at the end of the month, and your total balance will return to its original amount.
The consequences of not repaying one are the same as those in home equity loans.
A cash advance is for you if you have a credit card but need cash. If approved for this loan, you can take out a small cash from a nearby ATM, which will be added to your monthly balance.
The process is quite fast, too, as you only need a valid identification card and your PIN to go to your nearest bank and request a cash advance. However, you may have to pay a fee, and the APR for cash advances is quite high.
Payday loans, as the name suggests, allow you to get a small amount of money you'll pay in your next salary.
These loans are typically less than $500 and are expected to be paid back in two or three weeks. However, payday loans tend to have very high interest rates and fees. If you don’t want to pay off a very high interest rate, you might want to take a step back from getting this loan.
But, if you can afford to do so, payday loans are convenient if you need a fast and easy loan.
Joint Personal Loans
If you want a regular personal loan but have a bad credit score, you can take one with the help of a co-borrower.
For this one, you can take the support of a loved one to back you up once you can’t pay off your loan. With this approach, your lender will be willing to let you take a personal loan.
Bad credit loans are your go-to guys if you’re looking for funding but with a bad credit score. They’re handy since taking out a regular loan can be difficult if you have bad credit. Thankfully, there are quite a few of them there, so it’s easy for you to find one.
There are quite a few to choose from—from payday loans to joint personal loans. You just have to pick one that is suitable for your financial needs.